Got a hefty joining bonus and the taxes trimmed it almost into half. What did I do wrong? Will I get some of it back when I file next year? Also, anything I should do going forward? I don’t have a tax adviser and have been doing it myself so far

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Bonuses are usually withheld at very high amounts (40-45%), but they’re taxed at the end of the year as regular income, so you’ll likely see a refund come Tax time.

likehelpful

Thank you B1!

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You don't need a tax adviser just for a signing bonus. You will get some money back in your refund after filing.

helpfulfunny

Thanks M1!

I'll be your tax advisor. Let me know and I'll send you an engagement letter.

funny

The safe harbor withholding most employers use on bonuses is 22% for federal. When you add state/city, if applicable, plus FICA (if not over max) then you can get to a combined tax rate of near 40%. You will get a refund when you file your 1040 in 2022 based on actual tax owed less amount withheld.

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Thank you for clarifying!

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