Bonus Tax Surprise: How to Soften the Hit
Update: 2025-12-27
Description
Americans receiving year-end bonuses may be shocked to learn up to 35% of their cash goes to taxes, leaving them with less than expected. The IRS imposes a 22% flat rate on supplemental income, along with Social Security, Medicare, and state taxes. This often exceeds regular tax brackets, causing a significant financial hit. Spending like the full bonus is coming can lead to a shortfall and potentially push you into a higher tax bracket. However, bonuses are taxed as regular income on your final return, so if withholdings exceed your actual tax liability, youll receive a refund or credit. To mitigate the impact, max out retirement contributions, defer the bonus to a lower-bracket year, and be aware of taxable employer gifts. Plan smart to make the most of your bonus.
The Daily News Now! — Every city. Every story. AI-powered.
Hosted on Acast. See acast.com/privacy for more information.
Comments
In Channel
Download from Google Play
Download from App Store
United States00:00
00:00
x
