If you work as an employee, the amount of tax withheld from your paycheck is based upon the information you provided on Form W-4. However, if you receive any form of supplemental wages during the year, your employer may be required to withhold tax using a different method. To learn more how supplemental wages affect your tax return, see the full TurboTax article.
Are bonuses treated as regular income or singled out for special tax treatment? Are some types of bonuses more favorable than others? And are there any ways to minimize the tax impact of getting a bonus? Explore these questions with a quick visit to the TurboTax Blog.
Are you in line for a bonus at work? Lucky you! But don’t count on the entire bonus amount appearing in your paycheck. We all know that federal taxes will be taken out for part of your bonus, and your state may want some as well.
The same is true of other supplemental wages you receive, including overtime, vacation pay, back pay, commissions and even taxable fringe benefits.
Schedule E is the tax form you use to report supplemental income you earn from any of the following sources: renting real estate; interests in partnerships and S corporations; and distributions received from an estate or trust as well as from certain mortgage investments. Watch this video to learn more about filing schedule E supplemental income and loss.