Quote:
Originally Posted by hyrum
If you have tons of deductions on your W4 it should also apply to your bonus, no?
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Yes, the deductions still apply but bonuses are almost always taxed too much because the withholding schedule assumes that you get paid that same (extra) amount every week/month/payment cycle. So if you make $4000 a month and receive an one time $4000 bonus in December, the withholding schedule thinks you are making $96,000 a year and not $52,000 (so it overwithholds in December).