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2 answers

Tips, regular income and bonuses are ALL taxed at the same rate. You are confusing WITHHOLDING with actual tax liability. Withholding on tips should be at same as regular income. Bonuses can be subject to a fixed (25%) withholding OR the rate for regular income.

2007-04-22 08:40:35 · answer #1 · answered by STEVEN F 7 · 1 0

Tips, bonuses and wages are all taxed at the same rate as ordinary income. The only difference is that employers sometime do not pay their half of social security and Medicare, so you the receiver will be responsible and thus some bonuses seems to be taxed at a higher rate.

Best wishes.

2007-04-22 13:23:33 · answer #2 · answered by JQT 6 · 0 1

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