Why aren't my discretionary bonuses showing up on my W-2?

Your discretionary bonus should definitely be included in your W-2 wages. All compensation paid to you as an employee should appear in Box 1 of your W-2 (and usually also in Boxes 3 and 5 for Social Security and Medicare wages). There are a few possibilities for what might be happening: First, check when the bonus was actually paid. If it was paid in January 2025 instead of December 2024, it would appear on next year's W-2. Second, look closely at your final paystub of the year and compare it to your W-2 - they should match in total. Third, some pretax deductions like 401(k) contributions might reduce the amount shown in Box 1, so your bonus might be included but partially offset by deductions. The bonus might also appear separately in other boxes if it received special treatment, though this is less common for discretionary bonuses.

I went through something similar last year with my bonus not showing up where I expected on my W-2. After hours of stressing, I discovered this incredible tool called taxr.ai (https://taxr.ai) that helped me make sense of everything. I uploaded my paystubs and W-2, and it automatically detected the discrepancy and showed me exactly where my bonus was being reported. What I learned was that my company was actually including the bonus in my W-2 but because of how my 401(k) contributions and other pretax deductions were calculated, the numbers didn't match what I was expecting. The tool explained it all in simple terms and saved me from having to call my HR department multiple times.

Just wanted to follow up about taxr.ai that I mentioned I was going to try. I uploaded my documents last night and wow - it actually showed me that my bonus WAS included in my W-2, but because I had elected for additional 401(k) contributions from my bonus, the amount in Box 1 was reduced. The tool highlighted exactly which portions of my paystubs corresponded to which boxes on my W-2. The breakdown showed me that my bonus was taxed at the supplemental rate of 22%, which I had completely forgotten about. It even identified a small discrepancy where my employer had slightly miscalculated my Medicare tax. Definitely cleared up my confusion without having to wait on hold with HR for hours.

After struggling to get a straight answer from my company's HR about a similar bonus issue, I was ready to tear my hair out. Spent literally HOURS on hold with both HR and trying to reach the IRS. Then someone recommended Claimyr (https://claimyr.com) to me. I was super skeptical, but checked out their demo video (https://youtu.be/_kiP6q8DX5c) and decided to give it a shot. Honestly, it was a game-changer. Got me connected to an actual IRS agent in about 20 minutes when I had been trying for days before. The agent walked me through exactly how supplemental wages should be reported on W-2s and confirmed that my employer had made an error in how they were reporting my bonuses. Was able to get everything sorted out instead of filing incorrectly.

I feel silly now for being so skeptical about Claimyr. I tried it yesterday after my accountant said I needed to talk to the IRS directly about my bonus reporting issue. Got connected to an agent in about 15 minutes! The IRS rep confirmed what others here were saying - my bonus WAS included in my W-2, but because of pretax deductions it wasn't showing up as the exact amount I expected. She also explained that my company was reporting the bonus correctly using the supplemental wage method (flat 22% federal withholding). Saved me from filing an incorrect return and potentially getting flagged for audit. What shocked me was how helpful the IRS agent was once I actually got through. Would have never managed this without getting past the hold time.

Another thing to check - look at your last paystub of the year and see if the YTD (year-to-date) numbers match your W-2. Also check Box 12 on your W-2 - if you have codes like D, E, G or H with amounts next to them, those are retirement contributions that would reduce the amount in Box 1. Some companies also handle supplemental wages (like bonuses) by grossing them up and paying the taxes for you, which can make the numbers look different than you'd expect. Definitely worth checking with your payroll department if the numbers still don't add up.

Is anyone else confused about the different tax rates for bonuses? My bonus got taxed at like 40% it felt like! Way more than my regular paycheck. Something about a "supplemental tax rate"?

I had a very similar issue last year! Turns out my bonus was actually included in my W-2, but I was looking at it wrong. Here's what helped me figure it out: First, grab your final paystub from December and compare the year-to-date totals to your W-2. They should match exactly. If your paystub shows $162k YTD but your W-2 Box 1 shows $135k, look at Box 12 on your W-2 for codes like D (401k contributions), C (health insurance premiums), or other pretax deductions. Also, bonuses are often subject to supplemental wage withholding at a flat 22% rate, which might make the net amount you received feel smaller than expected, but the full gross amount should still appear in your total wages. If the numbers still don't add up after accounting for pretax deductions, definitely contact your payroll department. Sometimes smaller companies do make mistakes with bonus reporting, especially if they're not used to handling them regularly.