I am in the 25% tax bracket and I have a job that in addition to regular salary I get overtime, and sometimes tuition reimbursement which gets taxes after I pass the 5,250 threshold. I’m looking at the percentage I pay in Federal, MED, and SS versus my Fed Taxable gross and I notice that each pay period it fluctuates. (I do notice that my state taxes stays constant.) So for example one period I paid tax % for Fed, Med and SS, of 13.99%, 1.57% and 4.55% (total 20.10%) and another period I pay 15.20%, 1.56%, 4.51% (Total 21.27%) Anyone know what is causing the difference?
Because tax laws change?
jcole21 Wrote: ------------------------------------------------------- > Because tax laws change? These differences are on consecutive paychecks.
I believe the withholdings on any compensation beyond your annual salary are based on the highest marginal rate. I know the withholdings on my bonus (when I actually get one) are at a much higher rate than my regular salary.
higgmond Wrote: ------------------------------------------------------- > I believe the withholdings on any compensation > beyond your annual salary are based on the highest > marginal rate. I know the withholdings on my > bonus (when I actually get one) are at a much > higher rate than my regular salary. +1. If memory serves, they tax your bonus rate as if that was the amount you got on each of your paychecks, year-round, which vaults your tax rate into the stratosphere. I believe most of my bonus paychecks are hit with something like 40-50% withholding due to city, state, and federal in most years.
Well on paychecks where I had no bonus or tuition reimbursement, the Fed, MED, and SS did not add up to 25%. It was around 20% for most periods. Are these the 3 components that comprise the Federal tax bracket? Also is tuition reimbursement taxes at the high level that a bonus would be taxed?
Federal withholding for my bonus were 25%.
SlaveII Wrote: ------------------------------------------------------- > Well on paychecks where I had no bonus or tuition > reimbursement, the Fed, MED, and SS did not add up > to 25%. It was around 20% for most periods. Are > these the 3 components that comprise the Federal > tax bracket? 25% is only the marginal rate. Not all of your income is taxed at this rate. Google “tax brackets” to understand how it works.
Oh I see. So a portion is taxed at 10% and 15% before it reaches 25%. kay.
SlaveII Wrote: ------------------------------------------------------- > Oh I see. So a portion is taxed at 10% and 15% > before it reaches 25%. kay. You’re now 3/4 of the way to being a seasonal tax preparer for H&R Block.
higgmond Wrote: ------------------------------------------------------- > SlaveII Wrote: > -------------------------------------------------- > ----- > > Oh I see. So a portion is taxed at 10% and 15% > > before it reaches 25%. kay. > > > You’re now 3/4 of the way to being a seasonal tax > preparer for H&R Block. Final 25%, get hired?
justin88 Wrote: ------------------------------------------------------- > higgmond Wrote: > -------------------------------------------------- > ----- > > SlaveII Wrote: > > > -------------------------------------------------- > > > ----- > > > Oh I see. So a portion is taxed at 10% and > 15% > > > before it reaches 25%. kay. > > > > > > You’re now 3/4 of the way to being a seasonal > tax > > preparer for H&R Block. > > Final 25%, get hired? Deciding which check cashing place he wants to work next to for the next 2 months.