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    washfp's Avatar
    washfp Posts: 3, Reputation: 2
    New Member
    		  
    #1

    Aug 21, 2009, 09:11 AM
    Double withholding on sign-on bonus, H1B employee
    I am hoping a "Tax Master" will be able to help...

    I live in the State of Washington, started my first job a couple of weeks ago and just got my first paycheck today (hooray!)... I am on an H1B visa, by the way, in case it matters.

    On my paycheck, my total taxable income for my first pay period included a sign-on bonus, an advance (forgivable loan) I made before I started, and my 1/26th of my base salary.

    Here's the math:
    Sign-on Bonus $30,000.00
    Forgivable Loan $15,285.85
    Regular $ 5,576.92

    Total taxable income: $50,862.77 ------- no questions there

    Withholding (I elected 2 allowances) as follows:
    Federal @25.71% $13,076.92
    Medicare @1.45% $ 737.51
    SS @6.2% $ 3,153.49

    Total withheld: 33.36% $16,967.92 ----------- pretty clear there too

    Remaining net income: $33,894.85 ------- before deduction of forgivable loan

    What I actually got: $18,609.00 -------- meaning they took out the pre-tax amount of 15,285.85!

    My question (whew): Shouldn't they have taken the post-tax amount out of my net income since they already withheld tax from it? Assuming that same withholding of 33.36% on the $15,285.85 then they should only have taken $10,186.77 off my net pay, right?

    Am I missing something?:confused:
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Aug 24, 2009, 07:20 AM
    If they took the $15,285.85, which is the "forgiveable" loan, then that means they took the loan BACK, which does NOT make it forgiveable.

    If the loan is NOT forgiveable, then it is NOT compensation and should NOT be taxed.
    washfp's Avatar
    washfp Posts: 3, Reputation: 2
    New Member
    		  
    #3

    Aug 24, 2009, 08:29 AM

    I knew it, thanks! So I'm about 5k short then.

    I've seen your posts here - you're very helpful and specific. You're an asset to this website!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Aug 24, 2009, 02:21 PM
    Glad to help! Hope you get the problem with your pay resolved.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #5

    Sep 16, 2009, 02:21 PM
    BTW, thanks for the tip!
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