I completely understand your frustration! This is one of the most confusing aspects of payroll taxes. What you're seeing is actually pretty normal, unfortunately. The key thing to remember is that your bonus isn't actually being "taxed" at 40% - that's just the withholding rate. When you file your taxes, the bonus gets added to your regular income and taxed at your normal marginal rates (so likely closer to that 24% you mentioned). The reason you're seeing such high withholding is probably because your employer is using the "aggregate method" - they temporarily add your bonus to your regular paycheck and calculate withholding as if that huge amount was your normal salary. This pushes the withholding calculation into higher tax brackets temporarily. On top of the federal withholding, you've also got: - Social Security tax (6.2%) - Medicare tax (1.45%, plus potentially 0.9% additional if you're a high earner) - State income tax (varies by state) - Possibly local/city taxes - Any pre-tax deductions like 401k contributions All of this can easily add up to that 35-40% total withholding you're seeing. The good news is you'll likely get a nice chunk of that back as a refund when you file your taxes. You can also ask your payroll department if they'd consider using the flat 22% percentage method for future bonuses, or temporarily adjust your W-4 to reduce regular paycheck withholding to offset the over-withholding from your bonus.

This is such a frustrating experience, but you're definitely not alone! I went through the exact same shock when I saw my year-end bonus withholding. What's happening is likely that your employer is using the "aggregate method" for withholding - they temporarily combine your bonus with your regular salary and calculate taxes as if that inflated amount was your normal pay. This can easily push the withholding calculation into the 37% or even higher brackets, especially when you add in all the other deductions. Here's what's probably being taken out of your bonus: - Federal income tax (could be 22% flat rate OR much higher if using aggregate method) - Social Security (6.2%) - Medicare (1.45% + possible 0.9% additional Medicare tax for high earners) - State income tax (varies widely by state) - Any 401k, HSA, or other pre-tax deductions - Possibly local/city taxes All of this can definitely hit that 38-40% range you're seeing. The important thing to remember is that when you file your actual tax return next year, your bonus just gets added to your regular income and taxed at your normal progressive rates. So if your marginal rate is 24%, most of your bonus will be taxed at 24%, not 40%. You'll likely get a decent refund from all that over-withholding. You can ask HR if they'd switch to the 22% flat rate method for future bonuses, or consider temporarily adjusting your W-4 to reduce withholding on your regular paychecks for the rest of the year to offset this. Just make sure to change it back in January!

This has been such an enlightening discussion! As someone who's always been curious about how professional athletes handle their finances, I had no idea the tax situation was this complex. What really stands out to me is how the LLC structure isn't the "magic bullet" tax avoidance strategy that people sometimes make it out to be. It sounds like it's more about proper business organization and asset protection for legitimate business activities rather than trying to game the system. The multi-state filing requirements alone sound like they'd give me a headache! It makes total sense why these athletes need specialized CPAs rather than trying to use TurboTax like the rest of us. One thing I'm still wondering about - for college athletes who are now able to profit from their name, image, and likeness (NIL), do similar principles apply? Would a college quarterback getting local endorsement deals benefit from setting up an LLC, or is the income typically not high enough to justify the setup costs and complexity? Thanks to everyone who shared their expertise here - this has been way more educational than I expected when I clicked on this thread!

This thread has been incredibly informative! As someone who works in tax preparation, I see a lot of confusion around business entities and when they actually make sense. What I find interesting is how this applies beyond just NFL players. I have clients in other industries - real estate agents, consultants, freelancers - who ask similar questions about LLCs. The same principles generally apply: you need enough business income to justify the setup and compliance costs, and the entity works best for legitimate business expenses and liability protection rather than trying to avoid taxes on employment income. One thing I'd add for anyone considering this - make sure you understand the state-specific requirements where you're setting up the LLC. Some states like Delaware or Wyoming are popular for their business-friendly laws, but you might still need to register as a foreign entity in your home state if that's where you're actually doing business. And definitely factor in the ongoing costs - annual fees, registered agent fees, separate tax returns, etc. For the original poster asking about this - unless you're generating significant side income from business activities (not employment), you're probably better off with standard tax strategies like maximizing retirement contributions and taking advantage of available deductions and credits.

Just to add another perspective - I work in tax preparation and see this confusion come up frequently, especially with newlyweds filing jointly for the first time. The key distinction is that TANF and similar state cash assistance programs are considered "general welfare payments" under tax law, which makes them non-taxable. However, keep an eye out for any supplemental nutrition assistance or energy assistance programs you may have participated in - while these are also typically non-taxable, some states do send informational statements that can be confusing. The important thing is that if you didn't receive a 1099-G specifically, you're likely in the clear. Since you're filing jointly now, just make sure both you and your spouse account for any other income sources from the portion of 2023 before your October marriage.

Great question, and congrats on your recent marriage! To add to what others have shared - you're absolutely right to be thorough about this. TANF benefits are indeed non-taxable and you won't receive a 1099-G for them. One thing that might be helpful as you prepare your first joint return: create a simple checklist of all income sources for both you and your spouse for 2023. Include employment income, any unemployment benefits (which ARE taxable), interest, dividends, etc. This will help ensure you don't miss anything while also giving you confidence that you're not over-reporting. The IRS has a helpful tool called the "Interactive Tax Assistant" on their website that can walk you through what's taxable vs. non-taxable if you want additional confirmation. Since filing deadlines can be stressful, having that organized approach might give you some peace of mind!

This situation is incredibly frustrating and unfortunately all too common. Based on everything you've described, this sounds like clear employee misclassification. The combination of filling out W-4 and I-9 forms (employee paperwork), being promised eventual "real" employee status with benefits, working set hours with overtime expectations, and having late paychecks are all major red flags. Here's what I'd recommend doing immediately: 1. **Document everything** - Save all emails, take screenshots of your payroll system, keep records of hours worked and late payments. This will be crucial evidence. 2. **Calculate what you're owed** - As a misclassified employee, you're currently paying both employee AND employer portions of Social Security/Medicare taxes (15.3% instead of 7.65%). Your employer should be covering their half. 3. **File quarterly estimated taxes** - To avoid penalties, make sure you're making quarterly payments on the income you're receiving now, even while you work to resolve the classification issue. 4. **Consider your timing** - Many people wait until they have another job lined up before filing formal complaints, since retaliation (while illegal) does happen. You have multiple avenues for resolution: Form SS-8 with the IRS for status determination, Form 8919 for uncollected employment taxes, state labor department for wage violations, and potentially your state's unemployment office since misclassified workers are often denied benefits they should receive. Don't let them take advantage of your recent graduate status - you have rights here and this practice costs you real money.

This is a textbook case of employee misclassification, and you're absolutely right to be concerned. The fact that you completed W-4 and I-9 forms is a huge red flag - these are exclusively for employees, not independent contractors. Independent contractors should complete a W-9 form instead. The IRS uses a three-factor test to determine worker classification: behavioral control (do they control how you do your work?), financial control (who provides tools, how are you paid?), and relationship type (benefits, permanency, etc.). Based on your description - being hired for a "full-time position," working set hours with overtime expectations, and the promise of eventual benefits - you clearly meet the employee criteria. Here's what's happening financially: as a misclassified worker, you're currently responsible for paying the full 15.3% self-employment tax (both employee and employer portions of Social Security/Medicare taxes) instead of just the 7.65% employee portion. Your employer is essentially saving money by shifting their tax burden onto you. My advice: Start documenting everything immediately - save all communications about your employment status, screenshot that payroll system showing the withholding options, and keep detailed records of your hours and any overtime worked without compensation. You may want to consult with an employment attorney or file Form SS-8 with the IRS to get an official determination of your worker status. Don't let them take advantage of your recent graduate status - this practice is costing you significant money and denying you important protections and benefits you're entitled to as an employee.

I work at a tax prep office and see this question a lot. The main requirements for TurboTax Refund Advance are: 1) Expected refund of $500+ 2) Must use TurboTax Deluxe or higher (around $60-80) 3) Choose direct deposit 4) Pass their identity verification 5) Credit check (they don't specify exact score but 600+ helps). The advance amounts are usually $250, $500, $750, $1000, $1250, $1500, or $2000 max. With a $6k refund you'd likely qualify for the higher amounts if your credit is decent. Just remember it's a loan - if your actual refund ends up being less than expected, you still owe the full advance amount back.

Just wanted to add that timing matters too! I applied for the advance right when TurboTax opened up for 2024 tax season and got approved for $1500 with a credit score around 650. The earlier you apply, the better your chances seem to be since they probably have more funds available. Also make sure all your info matches exactly what's on your credit report - even small differences in how your name/address is entered can cause automatic denials. Good luck!