You guys that are concerned about how your "bonus" might be taxed are getting "taxes" and "withholding" confused. If you get a lump sum of money, you may, for example, see that FED taxes are withheld at 25 percent. That doesn't mean you're necessarily getting TAXED at 25 percent, it just means that 25 percent is being WITHHELD for future payment of taxes. All of your income, including your bonus, will ultimately be taxed at whatever rate you are normally taxed depending upon how much income you've earned through the year, your filing status, your deductions and credits, etc.

If your marginal tax rate ends up being less than 25 percent, per my example, you'll get that excess withholding back in the form of a larger refund or smaller amount due when you file your return for that tax year. If the company is withholding too much and you want your excess back sooner, then fill out a new W4 and have the company withhold less thoughout that tax year. Just be careful that you don't under-withhold and end up paying a penalty.

Clear as mud?