Can I claim all four deductions?

Yes — if you qualify for each one independently. Overtime and tips require W-2 employment. The car loan deduction requires a qualifying vehicle assembled in the U.S. The senior deduction requires age 65+.

Does this work for self-employed or 1099 contractors?

No. The overtime and tips deductions only apply to W-2 employees. Self-employed income does not qualify.

Is FICA (Social Security and Medicare) included?

No. FICA taxes still apply to all wages, including overtime and tips. These deductions only reduce federal income tax.

← W-4 Withholding Adjuster

Bonus Withholding Calculator

For bonus-season paychecks.

The short answer: At the scenario numbers pre-loaded below, the OBBBA deductions total $3,625, worth about $798 in federal income tax at a 22% marginal rate ($31 per biweekly paycheck) — that's the gap your W-4 can capture during the year.

Filing StatusAnnual Income (MAGI)All wages + tips, before deductionsHourly RateRegular rateAnnual Overtime HoursAnnual Tip Income0 if noneVehicle Loan Interest0 if noneYour Age

Federal Income Tax Withheld This Year (paystubs YTD)Your payroll is likely withholding as if none of the OBBBA deductions exist

Total OBBBA above-the-line deductions: $3,625

Extra tax you are on track to over-withhold: $798

≈ $31 per biweekly paycheck

File a revised W-4 (Step 4a "other income" negative adjustment or dependents/credits line) to bring this money home in each paycheck instead of waiting for a refund.

⚠️ This calculator provides estimates for informational and educational purposes only. It is not tax advice. Results are based on the One Big Beautiful Bill Act (OBBBA) and IRS Schedule 1-A. Consult a qualified tax professional for your specific situation.

Withholding vs. What You Actually Owe

Bonuses default to 22% supplemental withholding (37% over $1M) — often more than your true rate. Deductions on 4(b) reduce the regular checks to compensate.

• Supplemental rate ≠ your real bracket
• 4(b) adjusts the regular stream
• Reconcile at filing either way

Worked Example

A worker with OT plus a December bonus.

• Total OBBBA deductions: $3,625
• Federal income tax savings: $798 at the 22% marginal rate
• Per biweekly paycheck: $31 — capture it via a W-4 4(b) adjustment instead of waiting for refund season

Keep Reading

• /withholding/
• /rules/

Frequently Asked Questions

Why is my bonus taxed at 22%?

Supplemental-wage withholding rules — a default, not your final tax. Deductions and brackets reconcile it on the 1040.

Can OBBBA deductions fix bonus over-withholding?

Partially — they reduce total tax; the 4(b) entry spreads the benefit into regular paychecks.