Originally Posted by
tennisguru
Pay actually categorized as a bonus is required to be withheld at the 25% federal rate no matter what. If you know you have set bonuses coming in a given year you can adjust your withholding on your normal paychecks so that you pay less in income taxes every pay period (thus keeping your money for yourself) instead of giving the government and interest-free loan that they bump back to you as a refund.
This is absolute horse ____. I could send you my pay stubs, w2s, and tax return to prove my point but I prefer not to publish this information. Needless to say I have paid 20, 23, 27%(total taxes) 12, 15, 19% (federal income) on bonuses. The larger the bonus the larger the percentage withheld. Deductions also matter in percentage of taxes withheld.