Originally Posted by
Larry in TN
Not entirely true.
They are WITHHELD at a higher rate but the extra income they represent will be TAXED at your marginal rate. The result is that your refund will be larger, or what you owe will be less, when you file your return next year.
This is simply fixed by changing you withholding status from 1 to 5 or 10. Your bonus is withheld at the higher amout but all of you other checks during the year come a little fatter. This avoids the big refund at the end of the year and gives you more cash during the entire year. Either way, your pay at Endeavor is equivalent to approx $ 47.20/hr including the bonus.