Yearly Bonus Ripped Off?

Published

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.

The bonus is paid at a lump sum. That particular check is subject to 40%. At the time of filing your taxes, it is equalized to your yearly salary .. and it will end up being taxed at your income bracket.

Moral of the story.. don't look a gift horse in the mouth. Use a good accountant.

Up Vote Up Vote ×
Specializes in Post Anesthesia.

You don't loose your bonus because they "taxed it too much". For that one check it would calculate out that your yearly income will be MUCH higher than it will actualy be. The amount they take out does eat into the bonus for that check- sure- but it all works out in the end. You get the amount they "over taxed" back when you file your taxes. Instead of a nicer bonus, you get a bigger refund. What's the diff.?

Up Vote Up Vote ×
Specializes in CEN, CFRN, PHRN, RCIS, EMT-P.
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.)

A half truth it is still a lie my friend

http://reclaimdemocracy.org/real_tax_rates_plummet/

Eighty-two of the 275 companies, almost a third of the total, paid zero or less in federal income taxes in at least one year from 2001 to 2003. In the years they paid no income tax, these companies earned $102 billion in pretax U.S. profits. But instead of paying $35.6 billion in income taxes as the statutory 35 percent corporate tax rate seems to require, these companies generated so many excess tax breaks that they received outright tax rebate checks from the U.S. Treasury, totaling $12.6 billion. These companies' "negative tax rates" meant that they made more after taxes than before taxes in those no-tax years.

Up Vote Up Vote ×
Specializes in Geriatrics, Dialysis.
You don't loose your bonus because they "taxed it too much". For that one check it would calculate out that your yearly income will be MUCH higher than it will actualy be. The amount they take out does eat into the bonus for that check- sure- but it all works out in the end. You get the amount they "over taxed" back when you file your taxes. Instead of a nicer bonus, you get a bigger refund. What's the diff.?

Difference for me is I pay in to federal at tax time and usually get back from state. If I am lucky it ends up a net balance of around zero. Since I am already paying in, well there goes the refund part of it! Easier to just claim 9 that check and not worry about it when April comes around.

Up Vote Up Vote ×
Specializes in Critical Care, ED, Cath lab, CTPAC,Trauma.

MODERATOR NOTE:

If you wish to discuss the taxation, or lack thereof, of big business please start another thread.

Please stick to topic.

Up Vote Up Vote ×
Specializes in Nurse Leader specializing in Labor & Delivery.

Man, Esme. You take away all the fun.

Up Vote Up Vote ×
Specializes in Emergency.

Yep, bonuses are income. As has been mentioned above, the best are those where you get the full bonus amount after all taxes & deductions are taken. I have yet to see a bonus in nursing but received many "full" bonuses in my prior career.

Up Vote Up Vote ×
Specializes in Emergency Nursing.
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.

25% is just the Federal tax. I pay state taxes as well, mine are 6% I believe. Maybe some states pay a higher state tax, not sure. Between Federal, State, Medicare and SSI, net pay could be close to 40% less than gross pay when it is all said and done.

Up Vote Up Vote ×
Man, Esme. You take away all the fun.

I was just thinking to myself "I wonder if I can claim fomites on my taxes...? Or can my facility tax me based on fomite production and disperal per year....?"

Up Vote Up Vote ×
Specializes in Critical Care, ED, Cath lab, CTPAC,Trauma.
Man, Esme. You take away all the fun.

Sorry....;)

:whistling:

Up Vote Up Vote ×

If Klone likes it and Esme likes it... I must admit.. I'm pretty sure I'm gonna like it.

Up Vote Up Vote ×
Specializes in Post Anesthesia.
Difference for me is I pay in to federal at tax time and usually get back from state. If I am lucky it ends up a net balance of around zero. Since I am already paying in, well there goes the refund part of it! Easier to just claim 9 that check and not worry about it when April comes around.
The fact that you are getting a -$500 refund(bill) instead of a -$700 refund(bill) means you are getting the bonus back. If they didn't tax it at an inflated rate you would just owe more at tax time. Think of it this way, in December, you get an $800 bonus, but the company puts half of it into a "savings account" for your spring vacation needs. They use the "Federal Government Savings Bank" to keep half the bonus in(lousy interest rate by the way). In order to get your bonus, you have to file your federal taxes. So they only have to issue one mailing, they combine the bonus with your income tax refund/bill.
Up Vote Up Vote ×
+ Join the Discussion