Connect and get the inside scoop on Airline Companies

Welcome to Airline Pilot Forums - Connect and get the inside scoop on Airline Companies

If this is your first visit, be sure to check out the FAQ. Join our community today and start interacting with existing members. Registration is fast, simple and absolutely free.


User Tag List

Post Reply
 
Thread Tools Search this Thread Display Modes
Old 08-13-2018, 07:09 AM   #1  
Line Holder
Thread Starter
 
Joined APC: Feb 2018
Posts: 46
Default Tax question for bonuses

With many airlines giving bonuses I keep getting reminded “the taxes are more on bonuses” and to plan not to actually get much of the bonus. Correct me if I’m wrong but I still cant undestand why people are saying this. The withholdings are going to be higher but you get it all back when you file your taxes.

Example- If pay went from 5,000/month to 15,500 per month with a 10k bonus included on it, the aggregate earnings payroll uses to calculate withholdings with would go from 60,000 for the year to 186,000. Thanks to our progressive tax system that would put the check with the bonus on it in a higher tax bracket and the withholdings would be higher.

The other option is if the company issues a specific check for the bonus outside of my regular paycheck, withholdings are done at 22% as a base line. At the end of the year when I do my taxes sometimes the withholdings were to much and I get a refund, sometimes not enough and I would owe.

Is this all correct or am I missing something?
Biggbird is offline  
Old 08-13-2018, 09:17 AM   #2  
Line Holder
 
Joined APC: Oct 2017
Posts: 83
Default

Quote:
Originally Posted by Biggbird View Post
With many airlines giving bonuses I keep getting reminded “the taxes are more on bonuses” and to plan not to actually get much of the bonus. Correct me if I’m wrong but I still cant undestand why people are saying this. The withholdings are going to be higher but you get it all back when you file your taxes.

Example- If pay went from 5,000/month to 15,500 per month with a 10k bonus included on it, the aggregate earnings payroll uses to calculate withholdings with would go from 60,000 for the year to 186,000. Thanks to our progressive tax system that would put the check with the bonus on it in a higher tax bracket and the withholdings would be higher.

The other option is if the company issues a specific check for the bonus outside of my regular paycheck, withholdings are done at 22% as a base line. At the end of the year when I do my taxes sometimes the withholdings were to much and I get a refund, sometimes not enough and I would owe.

Is this all correct or am I missing something?
You are correct, some people don't understand the difference between withholding and actual taxes paid. Most large employers will withhold at a flat rate 22% for a bonus payment below $1 million. What you actually owe is determined when you file your return.
bamike is offline  
 
 
 

 
Post Reply
 



Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes


Related Topics
Thread Thread Starter Forum Replies Last Post
Roth 401k Nightflyer FedEx 20 01-06-2018 11:45 AM
Jetblue and the PVC benzoate Major 271 05-10-2013 10:34 AM
AMT: Tax Break For The Middle Class vagabond Money Talk 0 12-20-2007 10:49 AM
This answers it all MaxKts Cargo 25 08-02-2007 03:40 AM
Air Force VSP tax question Pilot_135 Money Talk 9 11-03-2006 09:02 AM


All times are GMT -8. The time now is 01:24 AM.