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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If bonuses were not taxed, this would create a simple loophole for avoiding taxes: decrease the normal salary while increasing bonuses. The government doesn’t want that, so it also taxes bonuses.
Politicians would tax every single moment of your life if they could. In a few generations they might actually get to that point
Do you have a problem with taxation in general?
They withhold at the highest rate. It’s just easier that way because your employer doesn’t know what your total income situation is (might have a side job or extra income elsewhere that affects your marginal tax rate). They just withhold the max, and then you settle out with the IRS every April when you file taxes, and anything withheld that was above and beyond your actual tax liability is refunded back.
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.
Because the government enjoys the privilege of telling your to give them whatever amount of money they decide, and if you refuse, they will either kidnap your or kill you.
If bonus wasn’t taxed everyone would be paid minimum wage and get a hefty bonus just to avoid taxes.
Folks like waiters/waitresses and bartenders who make a decent fraction of their income off of tips legally speaking have to pay taxes on that “bonus” income.
Why do you feel entitled to not have to pay taxes on your own sources of “bonus” income?
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