Bonus withholdings?

JDean3204

JDean3204

Well-Known Member
I have received W-2’s from both airlines I worked for last year. Both airlines I had received a bonus within 2017 calendar year, however my federal and state withholding boxes seem quite low. One airline my bonus was 7,500 and I received 4,500. The other was 10,000 and I received 5,800. That is a total of 7,200 withheld for taxes. Now.. on my W2 for airline A my fed and state withholdings only show a combined total of 3,800 for the year on 22,000 compensation. I worked there for five months and there is no way I made 22k without that bonus included. Airline B makes me scratch my head even more. The fed and state withholdings total a combined 6,600 for the year. This was on 32,000 and again that definitely has to include my bonus ( the one that 4,200 was withheld) in the compensation chart because there is no way my paychecks have equaled 32k in the 6 months I was here. My withholdings total 10,400 for the year on 54k compensation. Minus the bonus compensation (17,500) and withholdings (7,200) and that only equals 3,200 withheld through the year on 36k compensation. Am I reading into this wrong? Where does the bonus withholdings reflect on the W2? I will admit I know next to nothing about taxes, tried to google it and it seems like the bonuses are taxed at a heavier rate and are added to your total comp for the year. Why doesn’t it seem like the bonus withholdings are added to my total amount withheld for the year??
 
Last edited:
There is no reason to be afraid of taxes.

"Bonus" in our cases is just additional income. Typically there is a flat withholding. Some places will calculate the withholding based on earning that throughout the year therefore taking more out.

Don't confuse withhholding with tax owed. At the end of the year you have $x earnings and so will owe $y in taxes (Federal, state, SS, etc).

You made $54k in 2017. On that, your federal (7k), ss (3k), and Medicare (800) are around $10k assuming you're single.

Any tax software will do the calculations for you by just typing the info from your W2 in. Assuming no major deductions like mortgage etc, you'll file with the standard deduction.
 
Box 2 of your W2 should match the YTD federal income tax withheld on your final check of 2017. All tax withheld goes in box 2. There is no separate box for anything related to bonuses because at the end of the year your bonus is just considered wages. Yes, extra tax is withheld from a bonus check but at the end of the year your tax due is based on total compensation.
 
Derg said:
Audit insurance.

"OMG! I'm getting audited!" versus "Hello Derg, this is your accountant, the IRS had some questions, everything is taken care of, just thought I'd let you know, have a great day"
Click to expand...
You're actually still legally on the hook for mistakes your accountant makes.

You can always sue to recover penalties I guess.
 
wheelsup said:
You're actually still legally on the hook for mistakes your accountant makes.

You can always sue to recover penalties I guess.
Click to expand...
^ This.

This is why it is good to have a basic understanding of what is going on in your taxes. I have seen some horror stories when I was working in the mortgage industry.
 
Got married last year, both my wife and I switched jobs, thought about hiring a tax professional...dunno if it's worth it.
 
bLizZuE said:
Got married last year, both my wife and I switched jobs, thought about hiring a tax professional...dunno if it's worth it.
Click to expand...
Here is the solid truth on tax prep.

You will spend 90% of the time required getting together the info to give your tax preparer. He/she will spend 10% of the time inputting it into the same software you can purchase for $30 or in some cases can get for free.

There are some people out there with complicated situations or business earnings and depreciation. For them, an actual CPA can be useful (but expensive).

If you are just a wage slave, with some dividends sprinkled in, there is really no reason to hire it out. I would cringe when I heard FAs talking about it, I'm thinking, "you made $15k last year. You rent a room out to live in. You have no income other than the company W2...and you are paying someone $100 to fill out a 1040EZ?!?"

Next year will be even better, most people will be on the standard deduction, we won't have to track per diem expenses, it will be a ten minute process.
 
z987k said:
Could you explain that downside?
Click to expand...

Depending on your tax situation various things. For the typical one job, one paycheck pilot, it’s not totally awful, just more crap to track at tax time and more paperwork. In other words, a waste of time. And then the government gets a couple hundred more or less bucks for tons more time spent gathering paperwork for a limitless bureaucracy.

In my case I’ve got a salary from one business, a personal business/LLC, and relatively simple investments and it still generates a mountain of paperwork about 1.5” thick in a simple year. In a busy year, 2” or more of paper and quarterlies on the businesses. All so the IRS can take about the same as they’d take from anyone else at my income level.

My “usefulness to BS” ratio goes up significantly for a couple of weeks, even with an accountant assisting. Even then, the accounting firm is worth every penny.

Not because the tax load changes much or they find things (although they have, helpful things) but because they know generally what will flag audits and become problems, even when they’re legitimate things, and also my particular accountant guarantees they’ll be present at any IRS contact.

The only guy who can afford two warbirds at my airport is listed as the third best tax attorney in the country. That says something about 80% of politicians being lawyers.

Paying to play in the complex tax world is cheap insurance against having to pay to play later in an audit. If the term “audit” makes one think they get things right when doing one, no.

Although I do know one pilot who the IRS handed him a very large check telling him he was supposed to deduct his hotel rooms in his domicile (illegal). His tax attorney said, “They told you to do it in writing. It’s illegal. We told them that and they handed you the check anyway. Enjoy it.”
 
BigZ said:
Who's gonna care more about your taxes? A dude you paid $150 or you?
Click to expand...

If you actually have a complex tax situation it is not going to cost $150, the guy isn’t going to be found in a strip mall, and they’ll care plenty. They know nobody REALLY needs them with modern software and they’re a luxury.

Tossing huge piles of paper in an overnight mailer and emailing a couple of files to someone to deal with it is well worth it.

But it ain’t a buck fitty.

If you have a complex tax scenario, you’ll know. And you’ll ask people who own businesses who deal with taxes quarterly who they use.

It won’t be H&R Block. It’ll be someone with a decade track record of servicing businesses year round.

Minimum $300 and often more. You’ll know if you need it. Otherwise fire up the TurboTax and waste a weekend.
 
denverpilot said:
Depending on your tax situation various things. For the typical one job, one paycheck pilot, it’s not totally awful, just more crap to track at tax time and more paperwork. In other words, a waste of time. And then the government gets a couple hundred more or less bucks for tons more time spent gathering paperwork for a limitless bureaucracy.

In my case I’ve got a salary from one business, a personal business/LLC, and relatively simple investments and it still generates a mountain of paperwork about 1.5” thick in a simple year. In a busy year, 2” or more of paper and quarterlies on the businesses. All so the IRS can take about the same as they’d take from anyone else at my income level.

My “usefulness to BS” ratio goes up significantly for a couple of weeks, even with an accountant assisting. Even then, the accounting firm is worth every penny.

Not because the tax load changes much or they find things (although they have, helpful things) but because they know generally what will flag audits and become problems, even when they’re legitimate things, and also my particular accountant guarantees they’ll be present at any IRS contact.

The only guy who can afford two warbirds at my airport is listed as the third best tax attorney in the country. That says something about 80% of politicians being lawyers.

Paying to play in the complex tax world is cheap insurance against having to pay to play later in an audit. If the term “audit” makes one think they get things right when doing one, no.

Although I do know one pilot who the IRS handed him a very large check telling him he was supposed to deduct his hotel rooms in his domicile (illegal). His tax attorney said, “They told you to do it in writing. It’s illegal. We told them that and they handed you the check anyway. Enjoy it.”
Click to expand...
There is nothing else to track. Your "bonus" is earned income and included on your W2. You literally do nothing different if the "bonus" was paid out in equal installments over 26 weeks...ie a pay check.

I think there is a misunderstanding here on how or what a "bonus" is to an employee.

It's earned income.

That is it.
 
wheelsup said:
denverpilot said:
Depending on your tax situation various things. For the typical one job, one paycheck pilot, it’s not totally awful, just more crap to track at tax time and more paperwork. In other words, a waste of time. And then the government gets a couple hundred more or less bucks for tons more time spent gathering paperwork for a limitless bureaucracy.

In my case I’ve got a salary from one business, a personal business/LLC, and relatively simple investments and it still generates a mountain of paperwork about 1.5” thick in a simple year. In a busy year, 2” or more of paper and quarterlies on the businesses. All so the IRS can take about the same as they’d take from anyone else at my income level.

My “usefulness to BS” ratio goes up significantly for a couple of weeks, even with an accountant assisting. Even then, the accounting firm is worth every penny.

Not because the tax load changes much or they find things (although they have, helpful things) but because they know generally what will flag audits and become problems, even when they’re legitimate things, and also my particular accountant guarantees they’ll be present at any IRS contact.

The only guy who can afford two warbirds at my airport is listed as the third best tax attorney in the country. That says something about 80% of politicians being lawyers.

Paying to play in the complex tax world is cheap insurance against having to pay to play later in an audit. If the term “audit” makes one think they get things right when doing one, no.

Although I do know one pilot who the IRS handed him a very large check telling him he was supposed to deduct his hotel rooms in his domicile (illegal). His tax attorney said, “They told you to do it in writing. It’s illegal. We told them that and they handed you the check anyway. Enjoy it.”
Click to expand...
There is nothing else to track. Your "bonus" is earned income and included on your W2. You literally do nothing different if the "bonus" was paid out in equal installments over 26 weeks...ie a pay check.

I think there is a misunderstanding here on how or what a "bonus" is to an employee.

It's earned income.

That is it.
Click to expand...

I’ve had bonuses not reported in the W2. It all depends on the cluefulness and organization skills of the company.

In fact, screwing up tax documents is a good sign you need to find a different employer. :)

BTDT got the t-shirt.

Same comment about the $150 guy applies to some companies. They hired the $40,000/year new CPA to handle the employee tax reporting. Haha.

Fun times. Startups and broke companies. Always a treat.
 
denverpilot said:
I’ve had bonuses not reported in the W2. It all depends on the cluefulness and organization skills of the company.

In fact, screwing up tax documents is a good sign you need to find a different employer. :)

BTDT got the t-shirt.

Same comment about the $150 guy applies to some companies. They hired the $40,000/year new CPA to handle the employee tax reporting. Haha.

Fun times. Startups and broke companies. Always a treat.
Click to expand...
If it never got reported it never happened!!! :)
 
denverpilot said:
Minimum $300 and often more. You’ll know if you need it. Otherwise fire up the TurboTax and waste a weekend.
Click to expand...
I'm yet to find a good accountant.
I offered a decent one to double his rate, sat with him to work in certain depreciations etc, next year still did everything myself since he'd rather do two quick and ugly returns over one thorough at double the rate.

Not saying that I'm that good at it, but it's my money and I take time and effort to squeeze what I can out of it.
 
gliderboy said:
Trying to save money by doing your own taxes is, for most of us, a mistake. Hire a pro.
Click to expand...
It's very simple when you know where to look in the IRS pubs. It's all similar to FARs we are all used too. If you are a W2 earner, have the normal investments and mortgage it is very simple. Once you are running a larger LLC or corporation then I'd hire a book keeper and an accountant.
 
Last year was my first time trying a tax preparer, I ended up paying them $450 and still doing as much work for nothing more than I could have gotten done myself. This guy came highly recommended. Guess who'll be doing his own taxes this year again like usual.
 
You must log in or register to reply here.
Back
Top