Originally Posted by
BrownStreek
Enlighten me then oh tax expert. 48% withheld. Get about half of that back in April. A bonus does not count as income. All these ads and recruiting ploys are claiming "60k" first year blah blah blah. They are counting the bonus and even republic is counting per diem as income.
OK, I realize this may be the first real job for many of you but taxation is not that difficult of a concept.
All earned income is taxed at the same rate – regardless of how it is being paid out. Whether you call it wages, bonus, tips or something else is pure semantics (and even some per diem is taxed as income).
The only thing that varies may be the withholding rate. The IRS basically withholds money because (1) they don’t want to give you an interest free loan and (2) they probably worry that you spend it all before they can collect it.
And btw, you can tune your withholding to whatever you want it to be. Just dial up the exemptions on your W4. You can claim as many as you want…. Just make sure you don’t owe too much at the end of the year or the IRS collects a penalty for that interest free loan you created.
Regardless the same tax rate applies to all earned income when it is all reconciled on 4/15.