I work in a profession where my bonus is a small set amount and isn’t guaranteed (you have to qualify for it). I really look forward to earning the bonus and have to work pretty hard to get it. So why are bonuses taxed when I already have my regular salary chopped up? It’s pretty disheartening to see this small amount reduced after earning it.
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The IRS considers bonuses to be “supplemental income”. It’s not a gift to you from the company and they have to report it. IIRC, it’s taxed at a flat rate of like 22%. It’s not added to your income and taxed at the highest marginal rate. If you over pay your taxes by the end of the year, you’ll get some of that back.
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