Bonus Pay and IRS
10-04-2006 | 10:28 AM
#1
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Trust but Verify!!
Joined: May 2006
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From: MD11 CRA
Bonus Pay and IRS
Heard from a usually reliable source that our Bonus pay will be taxed at 50% and the other 50% would be taxed as income. UPS guys, how did your bonus pay get taxed? Anyone else have any info on this? I haven't heard it brought up at any roadshows. Thanks in advance for your help..
10-04-2006 | 03:16 PM
#4
Thread Starter
Trust but Verify!!
Joined: May 2006
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From: MD11 CRA
"bonus payments will be WITHHELD at ups at 25%...you are taxed at the end of the year at your rate..."
So the 25% is withheld initially and if you are in the 28% tax bracket you pay 3% more at tax time? If so that is a heck of a lot better than the scenario I heard. Thanks..
So the 25% is withheld initially and if you are in the 28% tax bracket you pay 3% more at tax time? If so that is a heck of a lot better than the scenario I heard. Thanks..
10-04-2006 | 03:45 PM
#5
New boss = Old boss
Joined: Mar 2005
Posts: 2,763
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From: Ca B737
No that is not the way the tax system works. I am in the 28% tax bracket but last year only paid about 15% tax. Why? Because I have many deductions (mostly a huge mortgage) and three kids. When all is said and done I don't pay a lot of tax. It is interesting how fast the marginal rate goes up after 200k however.
10-04-2006 | 06:01 PM
#6
Gets Weekends Off
Joined: Mar 2006
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Bonus Pay
Just received my end of contract CCB(contract completion bonus) and it was taxed at 25%, my previous payouts were also taxed at 25%.
This was with IASCO a CA employer.
I requested that they withhold at my W-4 rate, but they said the State Franchise Tax Board required the higher withholding....
This was with IASCO a CA employer.
I requested that they withhold at my W-4 rate, but they said the State Franchise Tax Board required the higher withholding....
10-04-2006 | 07:11 PM
#7
Part Time Employee
Joined: Jul 2006
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From: Dispersing Green House Gasses on a Global Basis
Bonus, Extra, Overtime pay are usually taxed at the 25% to 28% tax rate when paid to the employee. When you file at year end everything is figured on the tax bracket you are in. So you give extra to the IRS up front and then get the extra back when you file your taxes, unless of course your in the high tax bracket.
10-05-2006 | 04:45 AM
#9
Thread Starter
Trust but Verify!!
Joined: May 2006
Posts: 684
Likes: 0
From: MD11 CRA
"Bonus, Extra, Overtime pay are usually taxed at the 25% to 28% tax rate when paid to the employee. When you file at year end everything is figured on the tax bracket you are in. So you give extra to the IRS up front and then get the extra back when you file your taxes, unless of course your in the high tax bracket."
Thansk to all for the responses. Seems my usually reliable source missed the mark this time.
Thansk to all for the responses. Seems my usually reliable source missed the mark this time.
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