Originally Posted by
Flying Ninja
You're right, I just looked it up. It's not 40%, it's 25% or more depending on the method executed by the employer.
https://blog.turbotax.intuit.com/inc...-the-irs-8003/
Either way, it's not life changing money. Certainly it's not enough to attract a career changer that's making over six figures.
It is not taxed at 25%. The paragraph at the end of your link clearly points this out.
"No matter what method is used to withhold taxes from your bonus at payout, don’t panic. Remember, taxes may be withheld from your bonus at a higher tax rate at payout, but when you file your taxes at tax time your actual tax rate is based on your total taxable income and overall actual tax rate, which may be lower. Depending on your taxable income, actual tax rate, and eligible tax deductions and credits you may get some of the money withheld back in the form of a tax refund."