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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29966
Experience:  Taxes, Immigration, Labor Relations
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I will be receiving a 200K one time bonus through ...

Resolved Question:

I will be receiving a 200K one time bonus through my employer, can I increase my deductions to essentially have little taxes withheld without penalty and pay the State and Federal taxes on this amount when I file my 2008 taxes next year?
Submitted: 9 years ago.
Category: Tax
Expert:  Lev replied 9 years ago.

Bonuses are classified as supplemental wages.

According to IRS rules there are two ways for your employer to withhold taxes on supplemental wages - see for reference IRS publication 15 - pages 15-17:

  • flat 25% rate
  • the same way as for your regular wages based on your W4 filing.

If your employer uses flat 25% rate for supplemental wages withholding - there is nothing you may do as your employer may not use different method of withholding at the same time.

If your employer withholds taxes from supplemental wages based on W4 filing - you may ask your payroll person to change W4 - to reduce withholding.

Customer: replied 9 years ago.
Reply to LEV's Post: Will tere be any tax penalty if I ask my employer to increase payroll deductions to reduce withholding down to almost nothing?
Expert:  Lev replied 9 years ago.

Yes - the IRS will penalized your employer for not following the withholding rules

You will be subject of penalty if you pay taxes less than in past year - please see details in the publication 505 - pages 48 - see also exemptions on the page 49 To estimate possible penalties - please fill the form 2210 -

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