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taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 605
Experience:  Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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My employer just noticed they overpaid me $6500. This was a

Customer Question

Hello, My employer just noticed they overpaid me $6500. This was a commission bonus that was apparently paid twice to me. 2 months later my employer caught the error and wants me to repay in 3 equal payments (over the next 3 months). Here is my question...What happens to the money I paid taxes on?
Yes they did pay me $6500. Because it was commission I was taxed around 45%. So I only took home about half of this. Is it fair I have to pay back $6500? Do i get screwed of that $3000 plus in taxes?
Thanks
Submitted: 5 months ago.
Category: Tax
Expert:  taxmanrog replied 5 months ago.

Welcome to Just Answer! Thank you for giving me the opportunity to assist you! I will do my best to help!

Customer: replied 5 months ago.
Thanks
Expert:  taxmanrog replied 5 months ago.

Welcome to Just Answer! Thank you for giving me the opportunity to assist you! I will do my best to help!

When you repay them, have them run it as a "negative pay item". That will reduce your regular tax withholding for FICA and CA purposes. There will be a federal withholding tax reduction as well, but it may not be at the same rate as it was withheld on. But this will not matter, because once your W-2 reflects the reduced wages due to the repayment, and you file your tax return, you will get a refund of the overwithheld amounts.

I hope this answers your questions! IF you have any more please feel free to ask.

Thanks! Have a great week!

Roger