Yearly Bonus Ripped Off?

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So at my local hospital, nurses are getting a yearly bonus. But, I guess the IRS taxes the hell out of them. Up to 40 percent of their bonus is gone! Do you think this is crazy? A bonus is payment that a nurse earns, and it should not be tampered with! Maybe someone with more experience with taxes can explain why this happens.

Specializes in Med Surg.
That is the appropriate tax rate. Your gross bonus was reduced as per the IRS taxation code rates as a bonus is income. This is not slight of hand. Your choice of terminology is unprofessional, insensitive and racist. I understand the frustration but taxes are reality. If the bonus is 2x your weekly salary or more it can be taxed 40% or more as you are in a higher tax bracket. Just like you pay a higher tax rate when you work overtime. Now you know and can be better prepared if you earn a bonus again.

Remember the more you make the more they take.

The misinformation in these tax threads is astounding. Here are some federal tax rates for a single filer for 2014 (amounts are AFTER deductions):

$9,075 to $36,900: 15%

$36,900 to $89,350: 25%

$89,350 to $186,350: 28%

There is no "Special Nurse Bonus" tax rate. You pay the exact same rate. If your bonus was so large it bumped you to over $186,350 in taxable wages, please let me find a tissue for you.

Incidentally, the highest tax rate is 39.6% for taxable income over $406,750. I sincerely doubt the OP's bonus was in that range.

Your paycheck withholding rates can vary - but my experience is that they are never taxed at the huge percentages quoted by people like the OP. In the end, you are taxed at the same rate.

Math is not that hard, people.

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Specializes in Nurse Leader specializing in Labor & Delivery.

Actually, that's not *entirely* true. The employer can designate that the bonus be taxed at a flat 25%, and that is taxed separately from the regular income. But you're right, what I said earlier is incorrect - if they don't have the bonus taxed separately at 25%, it will just be taxed at the normal rate of your other income, the amount which is designated by you on your W-4.

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Specializes in NICU, ICU, PICU, Academia.
I am actually part gypsy....my Hungarian grandparents/parent. I have never been offended by this nor even realized it was insulting to gypsies. Live and learn.

I had no idea either!

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Specializes in Critical Care, ED, Cath lab, CTPAC,Trauma.
I had no idea either!

Maybe it's a regional thing

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Specializes in Med Surg.
Actually, that's not *entirely* true. The employer can designate that the bonus be taxed at a flat 25%, and that is taxed separately from the regular income. But you're right, what I said earlier is incorrect - if they don't have the bonus taxed separately at 25%, it will just be taxed at the normal rate of your other income, the amount which is designated by you on your W-4.

Actually, it is entirely true. While the bonus can be *withheld* as supplemental income at 25% by the employer, it is not taxed as such. The employee would get a refund - or owe - based on their actual tax rates. Which, as seen in the above tables for most nurses would be......25%.

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Specializes in Nurse Leader specializing in Labor & Delivery.

What's not entirely true is that there's no "special bonus tax rate" and there actually is, in the sense that a bonus is considered "supplemental income" by the IRS, and as such, can be treated differently than regular pay.

They have a few different options in how it's taxed, and that's up to the employer.

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Specializes in MDS/ UR.

Call your governmental representatives and object.

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I had no idea it was racist either, I've never seen it written and had assumed it was spelled *******, lol.

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Specializes in Emergency Room, Trauma ICU.

It's funny, I wonder how long a thread with the ***** word in the title would last. I'm beyond offended that not only is it still up but the most common response to it had been "didn't know, lol". That's beyond offensive.

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Specializes in none.

I know my title needs changed. I am so sorry, I never knew that this was racist. Unfortunately, I am not a subscriber and cannot openly change it without administration help. It will be fixed ASAP, I am contacting the help desk.

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Specializes in NICU, ICU, PICU, Academia.
It's funny, I wonder how long a thread with the n word in the title would last. I'm beyond offended that not only is it still up but the most common response to it had been "didn't know, lol". That's beyond offensive.

How is truly not knowing something (which the majority of people here seem to not know) 'beyond offensive'?

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Specializes in Critical Care, ED, Cath lab, CTPAC,Trauma.

MODERATOR NOTE:

I have removed all references to the word that has been found offensive and the title has been changed.

We can now return to the topic of the thread...can a bonus be taxed.

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