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 hospice.

Why do you need to resort to minimizing someone? Can't you argue your position without that?

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Specializes in Med Surg.
No, again, bonuses are considered "supplemental wages" by the IRS, and as such MAY be taxed differently, depending on how the employer handles it (but if it's taxed differently it's not 40%, as others have claimed, but a flat 25%.

See IRS publication #15, section 7.

That section is on withholding, not taxes - as has been stated above. Bonuses are taxed as income, pure and simple.

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Specializes in Med Surg.
Not every pay is taxed like this. But about 50% of my BONUS is taken out with taxes.

If you would like me to screenshot my pay stub for you I will. It is pretty pitiful though, and may hurt your eyes.

Nah, I've done this dance before. Many times. If your bonus is actually being withheld at the amounts you claim (which it never is in the cases I've seen people actually present their pay stubs), then you will get an appropriate refund at the end of the year.

If you are continually getting tax refunds (and are simultaneously unhappy about withholding amounts), then your complaint is not about taxes, it is about how you as an employee through your own actions have instructed your employer to over-withhold your paychecks.

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A bonus is payment that a nurse earns, and it should not be tampered with!

A salary is also a "payment that a nurse earns", correct? And it is definitely "tampered with." I'm curious why you set a bonus apart in your thinking from salary.

But yeah, it would be nice if we got to keep what we work so hard for. But there is this thing called reality. :(

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Specializes in mental health / psychiatic nursing.

Where I work now we don't get bonuses however my experience is that bonuses are normally taxed quite heavily. I got a hefty bonus at the end of every year when I worked at a law-firm, and a very large percentage immediately went into taxes. That being said, I typically got a nice refund from the IRS every spring so it didn't really bother me. I may not have had the money in December, but it did come back to me by April.

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Specializes in CEN, CFRN, PHRN, RCIS, EMT-P.

Tax the fat cats in Wall Street, they are the reason we all pay more...

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Specializes in hospice.

The United States currently has the highest corporate tax rate of any industrialized country in the world at 35%.

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Specializes in Nurse Leader specializing in Labor & Delivery.
That section is on withholding, not taxes - as has been stated above. Bonuses are taxed as income, pure and simple.

And that's what we're talking about here - we're talking about the amount directly taken out the paychecks, not the tax burden in April.

Bonuses CAN and MAY have different WITHHOLDING, depending on how the employer chooses to do it (they can choose to withhold a flat 25%, regardless of what the employee's W-4 is at).

And depending on the employee's W-4, that 25% may be significantly more or less than their regular pay withholding amount, thus giving the appearance of having significantly less of that net bonus amount.

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Specializes in CEN, CFRN, PHRN, RCIS, EMT-P.
The United States currently has the highest corporate tax rate of any industrialized country in the world at 35%.

Look up effective tax rate, the US actually pays big oil and others not the other way around. Stop watching Fox News lol

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After reading some of the comments in here I suggest you all get really good accountants

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Specializes in Nurse Leader specializing in Labor & Delivery.

The US also has one of the biggest corporate welfare systems of any industrialized nation.

I do not weep for corporate America.

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Specializes in hospice.
Look up effective tax rate, the US actually pays big oil and others not the other way around. Stop watching Fox News lol

Did I say anything factually wrong?

And I'll quit Fox News when you quit MSNBC. (I actually haven't watched Fox News in almost 3 years since I got rid of my cable.)

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