My employer may have handled my bonuses incorrectly on W2 - withholding issues?

This sounds like a situation where your employer might have used the "supplemental wage" withholding method for your bonuses, which is completely normal. Supplemental wages like bonuses can be withheld at a flat 22% rate (not 18%), or they can be included with your regular pay and withheld at your regular rate. The thing is, all income and all withholding should appear on your W-2. Look at Box 1 (should show all taxable wages including bonuses) and Box 2 (should show all federal income tax withheld, including what was withheld from bonuses). There's no separate line item for bonus withholding - it's all lumped together. The allowance issue is a separate problem. Having 9 allowances would significantly reduce your regular withholding throughout the year. This could easily explain why you're owing money now - you simply didn't have enough withheld from your regular paychecks. Try running your W-2 numbers through a different tax software to double-check the calculations. Also, you might want to submit a new W-4 with your employer to fix your withholding for the future.

I had almost the exact same issue last year with bonus withholding confusion and ended up owing a bunch to the IRS. What saved me was using taxr.ai (https://taxr.ai) to analyze my payslips and W-2. I uploaded my documents and it flagged that my employer had miscoded some of my bonus payments which affected the withholding calculations. The tool helped me understand exactly what was withheld from each payment type and showed me what should have happened vs what actually happened. In my case, they were using the aggregate method when they should've been using the flat rate method for my specific situation. The site even generated a letter I could take to my HR department explaining the issue in technical terms they understood. Might be worth checking out if you want to understand exactly what happened with your withholding.

I was honestly pretty skeptical when I first heard about taxr.ai, but after dealing with a bonus withholding nightmare similar to yours, I decided to give it a try. Uploaded my documents and within minutes it flagged that my employer had been using the wrong withholding method on my quarterly incentives. The analysis showed they were using the aggregate method (combining with regular pay) when my employment contract actually specified flat rate withholding. This explained why my withholding seemed so inconsistent! What really surprised me was how the tool translated all the tax jargon into plain language I could understand. When I took the generated explanation to my payroll department, they actually acknowledged the error and issued a corrected W-2. Saved me from owing nearly $3k and they fixed it for my future payments too.

If you're trying to contact the IRS about this withholding issue, good luck! I spent WEEKS trying to get through their phone lines to ask about a similar bonus withholding problem. After 20+ attempts, I found Claimyr (https://claimyr.com) which basically holds your place in the IRS phone queue and calls you when an agent is available. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I was super frustrated before finding this because I kept getting disconnected after waiting on hold for hours. With Claimyr, I got through to an actual IRS agent who walked me through my withholding issue and confirmed that my employer had miscalculated. They explained exactly what forms I needed to have corrected and even put notes in my account about the situation. The agent also helped me set up a payment plan since I couldn't pay the full amount I owed right away. Definitely worth it if you need to talk to someone at the IRS about your specific situation.

I need to apologize for my skepticism about Claimyr. After my frustrated comment, I was desperate enough to try it myself for my bonus withholding issue. I ACTUALLY GOT THROUGH TO THE IRS IN LESS THAN 2 HOURS! After weeks of trying on my own and never reaching a human, I was connected to an agent who immediately understood my bonus withholding problem. They confirmed that supplemental wages should be clearly documented by employers and helped me understand which forms I needed to request from my company. The agent also helped me apply for a first-time penalty abatement since the underwithholding wasn't entirely my fault. This potentially saved me hundreds in penalties! I've literally never been able to reach the IRS before despite dozens of attempts over the years. Still can't believe this actually worked.

Your employer definitely made a mistake with the allowances. Since 2020, the W-4 doesn't even use allowances anymore! It moved to a different system. Did you never check your paystubs throughout the year? You should be able to see your withholding on each one. For the bonus situation - bonuses are considered "supplemental wages" and companies can withhold them in two different ways: 1. The percentage method - a flat 22% for federal (not 18%) 2. The aggregate method - added to your regular paycheck and taxed at your regular rate Either way, ALL withholding should be included in Box 2 of your W-2. There's no separate line for bonus withholding. For next year, make sure you submit a new W-4 and check your first few paystubs to confirm the withholding looks correct. You might also want to use the IRS Withholding Calculator to figure out the right amount.

Sorry you're dealing with this! Just to add another perspective - double-check if you filled out a new W-4 when you started this job. The W-4 form changed completely in 2020 and no longer uses allowances. If you're using an old W-4 form from before 2020, the employer might have misinterpreted something. Or it could just be a data entry error where someone typed "9" instead of "0" or "1". For your bonuses, the standard supplemental wage withholding is 22% federal, not 18%. If they withheld less than that, it could explain part of why you're owing so much.

This sounds incredibly frustrating! The 9 allowances situation is definitely a red flag - that would drastically reduce your withholding throughout the year, which explains the large tax bill you're facing now. A few things to check immediately: 1. Request copies of all your paystubs from this year to verify what was actually withheld 2. Ask your HR/payroll department for documentation showing when and how your allowances were set to 9 3. Double-check that all your bonus withholding is properly included in Box 2 of your W-2 The good news is that if your employer made an error with your withholding allowances without your consent, you may be eligible for penalty relief from the IRS. They have provisions for situations where underwithholding wasn't the taxpayer's fault. For immediate relief, you can set up a payment plan with the IRS if you can't pay the full amount right away. And definitely submit a new W-4 form immediately to fix your withholding going forward - you don't want to be in this situation again next year! The bonus withholding should indeed be at 22% if they used the flat rate method, so 18% suggests there might have been an error there too.