How can it be a Christmas Bonus if they take taxes out of it.?

Question

My boss gives us a Christmas Bonus but it is in the form of a payroll check with taxes taken out.

Answer 1

Christmas Bonus!?!?!? Do they still exist??? I thought that that was a word that only upper mgmt knew anymore.

Answer 2

Bonuses are taxable by law, so your employer doesn't really have a choice. The withholding on the bonus might end up a little higher than your usual withholding, but when you do your tax return, it will be taxed at the same rate as the same amount of wages would have been, not at a higher rate.

It's still extra money. Be glad you got it.

Answer 3

We have pay as you go tax system. Bonus is not your regular payroll. Therefore, it has special tax treatment. Federal income tax is flat 27%, then state income tax(if you have one), then medicare and social security totaling 7.65%. So your bonus could be taxed 40-45%. When you file your tax return, you will have credit for the income tax paid, and some of the tax paid could be refunded

Answer 4

Under the tax code deminimus gifts are not taxable. I.E. a turkey or a cash bonus of $25. Larger amounts are taxable compensation to the employee. Since it is taxable withholdings apply. It's a bonus because it is not part of your annual salary.

Answer 5

This way it's a bonus to the tax man too. Merry Christmas.

Answer 6

Regardless if it's taxed or not, isn't if still "bonus" money. Basically free to you? Wow. You get free money and yet you complain.

Answer 7

If you don't want the net amount, give it to charity. All income and gifts from your employer are taxable as income.

Answer 8

All income must be taxed. Especially unearned income which is taxed heavier.

Answer 9

It's still income, jack.

Answer 10

Bush needs his bonus too. He thanks you