2007-08-05 15:14:12 · 3 answers · asked by Anonymous in Politics & Government ➔ Politics
Bonuses are taxed at the rate of 25%. If that is more then your ususal tax bracket, when you file your income taxes, you are refunded the excess money.
2007-08-07 12:45:11 · answer #1 · answered by xg6 7 · 0⤊ 0⤋
The W-4 form is designed to over-collect. If you are paid $600 each week and one week are paid a bonus of $600 in addition to your regular pay, the withholding is calculated as though you were going to earn $1200 every week for the rest of the year. For people with variable income, such as sales people this results in a lot more over-withholding over the course of a year.
2007-08-05 22:22:16 · answer #2 · answered by Keith 6 · 0⤊ 0⤋
Keith is right, but it is only withholding that increases for that bonus paycheck. When you file your tax return, all of your earnings are taxed at the same rate, and most of that extra withholding will either add to your refund, or decrease a balance due.
2007-08-05 22:26:02 · answer #3 · answered by irongrama 6 · 0⤊ 0⤋