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I recently re-enlisted for a fairly large bonus. I have a slight idea of how bonuses work, but I don’t know how they effect my income tax return for next year. Here are my questions:
1) Is the 25% taken off the top shown in the federal tax section of my LES?
2) Is the untaxed bonus amount added to my gross income for this year? Or is the taxes amount added?
3) Obviously it depends on a lot of factors, but how much of the taxed amount can I expect to receive back?
4) I’m fairly confident this bonus will push me into the next higher tax bracket, but how will this generally effect my overall return?
1) Is the 25% taken off the top shown in the federal tax section of my LES?
2) Is the untaxed bonus amount added to my gross income for this year? Or is the taxes amount added?
3) Obviously it depends on a lot of factors, but how much of the taxed amount can I expect to receive back?
4) I’m fairly confident this bonus will push me into the next higher tax bracket, but how will this generally effect my overall return?
RallyPoint
Re-enlistment
Finance
Posted 6 y ago
Responses: 7
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This is the way I explain it when someone reenlists:
1. 22% is taken immediately for federal taxes (recent change from the 25% previously). Your state may take additional taxes.
2. Your bonus money counts as income and is rolled into your total gross income, and the taxed portion is rolled into your taxes paid. Bonuses, unlike BAH, don't have any special tax exemption.
3. You will receive the portion back that was overly taxed.
4. It will probably move you to a higher tax bracket, however definitely not 22%, so you've probably overpaid your yearly taxes with your bonus tax. So you should get money back if it was big enough.
1. 22% is taken immediately for federal taxes (recent change from the 25% previously). Your state may take additional taxes.
2. Your bonus money counts as income and is rolled into your total gross income, and the taxed portion is rolled into your taxes paid. Bonuses, unlike BAH, don't have any special tax exemption.
3. You will receive the portion back that was overly taxed.
4. It will probably move you to a higher tax bracket, however definitely not 22%, so you've probably overpaid your yearly taxes with your bonus tax. So you should get money back if it was big enough.
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MAJ (Join to see)
+1,
Expect a good tax return (better than normal) when you file your taxes because they withheld your bonus at a higher level then normal.
Expect a good tax return (better than normal) when you file your taxes because they withheld your bonus at a higher level then normal.
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