Trending Content
Career Resources
WSO Free Modeling Series - Now Open Through
May 31, 2024
9 Free Financial Modeling Lessons
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
+Bonus: Get 27 financial modeling templates in swipe file
+Bonus: Get 27 financial modeling templates in swipe file
Federally, bonuses are supposed to be withheld at 22% or the max marginal tax rate. You're probably best if by reducing your withholding on your regular pay.
Don’t you just get it back though when you do a tax refund? With that said, what if you set up an LLC and pay yourself a salary out of this LLC’s operating account. Than on Dec 31, withdraw the funds from the year minus your salary for next year. That way you don’t have to pay these huge taxes on each commission. It’s a slower drip to your money, but just me split Balling here.
So, as others have said.. if you are meaning that your commissions get withheld at 22% (and some higher state rate if applicable, I think its like 9% in NY from my experience), as in you are a regular w2 employee (not 1099 independent contractor)... then just know you are NOT actually being taxed any differently... just withheld differently (I think its called the supplemental earnings withholding rate, and applies to bonuses or other "non regular" payments). So, when you file your annual taxes, you will pay the actual amount owed (based on brackets) just like everyone else, makes no difference.
As others have said, if you think this will legit lead you to overpayment (and thus a big refund), then you could reduce withholding on regular paycheck. Just be careful that you don't underpay as the IRS will happily tack on penalties and interests. Welcome to the big leagues!!! Taxes suck, vote republican, move to Florida, and good luck!
buy real estate, run cost segregation. rinse & repeat.
Laborum laboriosam aut ut nesciunt inventore voluptatibus blanditiis. Commodi maxime maxime et. Et unde sapiente rem blanditiis enim. Officiis doloribus saepe et. Et distinctio odit pariatur ut. Aut molestiae doloribus perspiciatis ex. Sunt nisi qui magnam officiis consequuntur fuga sunt.
Rerum qui omnis commodi tenetur sed consequatur. Sed explicabo est in.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...