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Reply to "Taxes on bonuses"
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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Let me try to explain more clearly: At the end of the year, after you have filed and paid/been refunded what you owe, you will have paid the same amount of tax whether you earned a wage of 200k all in salary or a wage of 100k plus a 100k bonus. In that sense, bonuses are not taxed at any higher or lower rate than your other wage income. However, depending on how the company treats the payment and your income, the withholding tax may be at a higher or lower rate than the rest of your earned income. But this is just a temporary issue until your taxes are filed. [/quote] Aargh. Many people have provided clear explanations, but you seem intent on confusing the issue. First, as for, "In that sense, bonuses are not taxed at any higher or lower rate than your other wage income." The implication is that there is some sense in which bonuses are taxed at a different rate than other income. That's wrong. Bonuses are ordinary income, and are taxed at the same rate as other ordinary income. There is no nuance here. Second, there is no "withholding tax." That's not a thing, much like fetch. There are amounts that are withheld, and sometimes a greater percentage of income can be withheld than other times, based on a variety of factors. But "withholding tax" suggests that this is something that it's not. You keep trying and screwing up. Just take the L. [/quote] No need to be so unpleasant. "In that sense, bonuses are not taxed at any higher or lower rate than your other wage income." The implication is that there is some sense in which bonuses are taxed at a different rate than other income. That's wrong. Bonuses are ordinary income, and are taxed at the same rate as other ordinary income. There is no nuance here. The nuance is that you pay different marginal rates on different amounts. so everything is not taxed at the same rate. But I think the point that you pay the same tax on the same amount whether bonus or salary is made very clearly. Withholding tax is just semantics as pp said. Please try to work on being a nicer person. [/quote]
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