Clerkship Bonus after taxes?

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Anonymous User
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Clerkship Bonus after taxes?

Postby Anonymous User » Mon Mar 05, 2012 9:12 pm

The firm that I am going to be working for in D.C. is going to give me a $50,000 clerkship bonus in my first paycheck. Does anyone have any idea how much the check will actually be for after taxes?

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Re: Clerkship Bonus after taxes?

Postby Anonymous User » Mon Mar 05, 2012 9:20 pm

Well at $160,000, you're at the tail end of the 28% bracket. Part of that will be taxed at 28% and part at 33%, subject to state and local taxes. It's impossible to say exactly how it will be taxed unless you want to tell us your filing status, deductions, credits, etc. This is not legal advice.

TooOld4This
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Re: Clerkship Bonus after taxes?

Postby TooOld4This » Mon Mar 05, 2012 9:23 pm

What are you asking? What the check will be or how much tax you will actually owe?

There is no "bonus tax rate." However, since bonuses are essentially "last dollar" money, you generally want to withhold at your marginal tax rate, unless you have otherwise overpaid. This is because your salary withholding rate generally assumes that you will make the amount of your paycheck times the frequency of pay (i.e. if you get paid semimonthly you will make any given paycheck times 24 in a year). Your tax withholding for salary will be your estimated tax obligation for the year divided by the number of paychecks, even though you technically pay 10% tax on the first $X dollars, 15% on the next $X, etc. Because of this, employers will often set a default rate (say 28%) that they will withhold from bonuses unless you give them other instructions.

TL;DR: figure out what you should owe on the money and ask if your employer can tax it at the proper rate, otherwise adjust your withholding on your W-4 to account for the under/overpayment.

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Re: Clerkship Bonus after taxes?

Postby Anonymous User » Mon Mar 05, 2012 9:25 pm

When I used to get bonuses >10K they (not a law firm) would take out something around 40% in taxes. I am not sure why or if this is typical procedures given I generally was not near the top federal rate and didn't have local taxes and a pretty low state rate. I didn't care since it helped me out at the end of the year.

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steve_nash
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Re: Clerkship Bonus after taxes?

Postby steve_nash » Mon Mar 05, 2012 11:35 pm

Speaking in broad strokes, my friend who received a $50,000 clerkship bonus, with NY market salary, said after taxes, the bonus was a little less than $30,000 but greater than $25,000. I imagine it'll be similar for you. If you want to calculate it more precisely, it'll be along the lines of the 28% bracket mentioned above, plus either the ~6% VA income or 8.5% DC income, and all the other variables in our great tax code.

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Re: Clerkship Bonus after taxes?

Postby 09042014 » Mon Mar 05, 2012 11:43 pm

steve_nash wrote:Speaking in broad strokes, my friend who received a $50,000 clerkship bonus, with NY market salary, said after taxes, the bonus was a little less than $30,000 but greater than $25,000. I imagine it'll be similar for you. If you want to calculate it more precisely, it'll be along the lines of the 28% bracket mentioned above, plus either the ~6% VA income or 8.5% DC income, and all the other variables in our great tax code.


I assume you are speaking towards the amount withheld. You won't be taxed over 40% in actuality. The withholding on bonus checks is huge, but you'll get a lot back in the refund.

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steve_nash
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Re: Clerkship Bonus after taxes?

Postby steve_nash » Mon Mar 05, 2012 11:59 pm

Desert Fox wrote:
steve_nash wrote:Speaking in broad strokes, my friend who received a $50,000 clerkship bonus, with NY market salary, said after taxes, the bonus was a little less than $30,000 but greater than $25,000. I imagine it'll be similar for you. If you want to calculate it more precisely, it'll be along the lines of the 28% bracket mentioned above, plus either the ~6% VA income or 8.5% DC income, and all the other variables in our great tax code.


I assume you are speaking towards the amount withheld. You won't be taxed over 40% in actuality. The withholding on bonus checks is huge, but you'll get a lot back in the refund.


Yes, sorry: should have been more clear.

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Re: Clerkship Bonus after taxes?

Postby Anonymous User » Tue Mar 06, 2012 3:56 pm

What your check will be= about 60-50% of the bonus (after tax)

Since you are withheld at a rate that assumes 160 full year- you should slightly be overwithheld and get a refund at year end

What you will owe- depends on your full year marginal tax bracket. If you made 60k for 8 months and 160k pro rated for 4 months (40k + 54k= 94k) would put you in a 28% tax bracket. Add FICA Medicare (a portion of this maxes out around 100k) and State taxes- you're in about the 40% plus tax bracket on your marginal bonus dollars.

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Re: Clerkship Bonus after taxes?

Postby 005618502 » Tue Mar 06, 2012 4:30 pm

I think OP wanted a number. 50,000 x .28 = 14,000
50,000 x .06 = 3,000

End of year after rebate you should get 32,000 from this

This is high end since your whole check wont be hit with the high 28% bracket (0-5000 is hit at 1% and so on)

Initially a 50,000 dollar bonus should put 26-29 thousand dollars in your pocket at the day of pay

Riles246
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Re: Clerkship Bonus after taxes?

Postby Riles246 » Wed Mar 07, 2012 2:25 pm

AssumptionRequired wrote:I think OP wanted a number. 50,000 x .28 = 14,000
50,000 x .06 = 3,000

End of year after rebate you should get 32,000 from this

This is high end since your whole check wont be hit with the high 28% bracket (0-5000 is hit at 1% and so on)

Initially a 50,000 dollar bonus should put 26-29 thousand dollars in your pocket at the day of pay


Bonuses are also subject to SSI and whatnot so don't forget the supplemental taxes. But I agree with the $26-29k ballpark figure as a take-home amount on the check.

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Re: Clerkship Bonus after taxes?

Postby Anonymous User » Sun Mar 11, 2012 5:14 pm

Can anyone comment on a typical tax rate for the GS-11 salary (about $60K) for first-year law clerks? Thanks!




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