Why are Bonus' taxed so much? — Page 2

brdlwyr - you cannot afford me. plus i would chuckle everytime you asked me to take dictation.

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My secretary takes short hand - which is very handy at times.

The bonus is not TAXED differently, but taxes are WITHHELD at a higher rate because of what Middie said.

Presumably you will get the excess back in your tax refund.

If you want to circumvent this is the future, you can submit a W4 to your payroll office with a higher number of exemptions in time for the bonus check to be cut. This will reduce the amount withheld in your paycheck and make your bonus check closer to the actual bonus amount.

After the bonus, make sure that you submit another W4 and change it BACK or you'll be hit with a bad tax bill the following year.

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hence ... Bucks County

My bonus will pay for my lodging for my next trip to NYC...I'm a happy camper!

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well Joey... 'taxed differently' and the rate at which your 'taxes are withheld' are the same to me, at least in layman's terms. It's merely semantics.
I won't bore the crowd with all the different TYPE of taxes out there. What a boring thread this is! `

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Updated On: 12/16/05 at 11:09 AM

be glad you guys get anything.
I am a temp. I am not invited to the company party, I get no bonuses, I get no presents from the staff here.
What's worse, my temp agency sent me...a holiday card.
It's sort of a, "thanks for making us money!"
And, to top it all off, I get no other bonuses either, as in sick days or vacation. because they primarily staff financial institutions, where overtime is a daily matter, they decided to increase the requirements for vacation pay or sick days.
Now, you have to work an average of 55 hours about 47 weeks out of the year to qualify for sick/vacation days.
Thanks, capitalism!

Remember how romantic it is to be a starving artist--who else saw 'Moulin Rouge?' Anyway, you people really do suffer for your art. I'm too much of a princess for that.

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Updated On: 12/16/05 at 11:22 AM

can i be "temp for a day" so i don't have to go to the holiday party?

oh, and middy, you're too much of a princess for EVERYTHING.

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I'm sure this info isn't going to make anybody feel better about their reduced bonus checks - but this is how it works:

At the beginning of the year, or whenever you are hired, a computation is done to determine what the federal tax withholding would be for someone receiving your salary. The computation is based on your ANNUAL salary and the number of exemptions you claim on your W2 form. It's just a best-guess shot at making a deduction that's close to what your assumed tax liability is going to be. This isn't being done to screw you out of your money. On the contrary - it's done to save you the shock of being hit with a huge tax bill at the end of the year when you file your tax return. In fact, there is a legal requirement that you have a close estimate of your taxes withheld before your check is written. (Uncle Sam is always going to make sure he gets his before you get what's left!)

At the end of the year, you file a tax return that shows exactly what you were paid and what was deducted. You either get the amount they OVERDEDUCTED back as your return, or you send Sam a check for the amount that was UNDERDEDUCTED. If that check is very large, you will also have to pay a large penalty.

To keep this from happening to you, your employer will OVERdeduct taxes from any additional money you receive during the year. This is any money that is in addition to your annual salary. That's because this amount was unknown during the year when your taxes were withheld. Neither your employer, nor you know if that additional income is going to put you into a higher tax bracket or not. If it doesn't, then you'll get all that extra tax money back in your refund. If it does, then they've saved you having to pay a penalty to the Feds when you file your return.

(I apologize for the boring detail. I was a finance and budget officer in the federal gov't for 30 years and chief of the Payroll department in a large government agency for a good part of that time. I've been brainwashed.....)

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You're right. It's easier to gripe about something when you stay completely ignorant about it. Why find out that you haven't got anything to complain about? That takes all the fun out of Christmas.

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Boobsy, i read virtually all your posts. And if you continue with naughty-boy avatars instead of big-breasted actresses, I promise never to miss one.

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Updated On: 12/16/05 at 11:54 AM

Because we all know PalJoey don't like Bush of any kind.

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