Interrupter CheckmarkInterrupter IconFacebookGoogle PlusInstagramGroupRamsey SolutionsTwitterYouTubeExpand MenuStoreCloseSearchExpand MenuBackStoreSign in

Ask Dave

Burned By Bonus

Karen and her husband get popped by taxes whenever he gets a bonus and need to plan for it better.

QUESTION: Karen is doing Dave’s plan. Her husband gets a bonus through work, but they never take out enough taxes, so they get clobbered around tax time with the IRS. They make $150,000 a year, and his bonus this year was $105,000. The company withheld 18%, but that’s not enough.

ANSWER: If you make $150,000 and have no bonuses, then you are in a 33% income tax bracket. In that case, everything he makes in bonuses will be in the 33% to 33% bracket. I would hold 40 cents on the dollar to be safe, and if they don’t, then you need to. For $105,000, that’s about $40,000. If they withheld $15,000, then you need to put $25,000 in a money market and be ready.

If they withheld 18%, then you need to hold 22% on yourself to get that extra percentage. When he gets the check, deposit it and write a check from that into savings. That way, you’re fine if you owe money and have some extra savings if you don’t.

Thank you! Your checklist is on its way! 

Taxes Made Easy! 

Taxes Made Easy

Take the stress out of tax prep with our free checklist.

Taxes Made Easy! 

Take the stress out of tax prep with our free checklist.