I just got a FT consulting offer, and I am wondering about taxes. For example, if my base salary is 80k, 5k signing bonus, and 10k performance bonus, how is it taxed (specific numbers changed for privacy)? Is the signing/performance bonus added to the income when determining total tax rate? Or are they taxed at separate rates?
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It's taxed as income just the same as your salary
https://smartasset.com/taxes/how-to-avoid-taxes-on-bonus-check
"If your employer delivers the bonus to you as part of your regular paycheck, it will be taxed like regular income. If it’s delivered with a separate check, it’s taxed as supplemental income. The difference is that supplemental income is taxed at a flat 22% while regular income is taxed at your regular rate.
It is usually less costly to have the bonus delivered as supplemental income rather than as an amount added to your regular check. You may be able to get your employer to pay you so the bonus is regarded as supplemental income. However, which approach will result lower taxes depends on your individual situation."
I believe you are talking about withholdings and not the tax due at the end of the day. Bonuses will be considered normal income and reported in your W2 combined with your base compensation. When you pay taxes (at the end of the year) that is the number that matters.
Same rate. People are generally just fucking stupid and don't understand withholdings so they think it get's taxed at a higher rate. What happens is payroll companies see you get a big check for an extra $10,000 for a two week period. Their software annualizes this amount and taxes it as if you would get a paycheck for that amount every two weeks.
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