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Taxing Bonuses |
Dee55
Joined: Apr 14, 2005
Posts: 19 |  Posted: 2006-04-10 09:05
Does anyone know how bonuses are to be taxed? I know many years ago there was a "bonus" option that just taxed a flat 20%, but it is my understanding that this is no longer allowed.
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cynbrandt
Joined: Nov 11, 2003
Posts: 1782 | Posted: 2006-04-10 10:00
I believe bonuses are considered "supplemental income" and subject to the federal tax rate of 25%. Social security/medical and applicable state taxes also would be withheld.
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rrupert
Joined: Feb 15, 2006
Posts: 1612 | Posted: 2006-04-10 11:45
Check out IRS Publication 15 at www.irs.gov. It lays out all the stipulations and how bonuses are generally taxed.
rr
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nork3
Joined: Feb 12, 2002
Posts: 3876 | Posted: 2006-04-11 12:47
There is a mandatory withholding on bonus payments which is roughly 40% of the bonus. It includes federal withholding as well as FICA/FITW/Medicare
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ellymae
Joined: May 06, 2006
Posts: 181 | Posted: 2006-05-06 08:36
25% Fed, plus Fica and State. Ran my bonus WAY down. One of the things I wish the IRS would change.
Cathy
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AMLewis
Joined: Apr 18, 2006
Posts: 80 | Posted: 2006-05-16 11:00
Where do you lucky 25% folks live? In CA it's approxmately 40% and it really takes the bang out of the buck - almost literally.
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howard7
Joined: Sep 13, 2001
Posts: 2615 | Posted: 2006-05-18 19:37
Please tell me that HR people are not complaining about paying taxes on bonuses. How do you think your executives feel?
Taxes are the LOW COST that you contribute to have the society that permits the freedoms we have.
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AMLewis
Joined: Apr 18, 2006
Posts: 80 | Posted: 2006-05-19 14:51
Please tell me that I'm not being subjected to jingoistic platitudes on a forum that has nothing to do with patriotism and appreciation of this country or the lack thereof.
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