Understanding Bonus Taxation: Who Bears the Tax Burden and How Are Bonuses Taxed?
To grasp bonus taxation, remember: you carry the tax weight, and bonuses face federal tax, Medicare, and Social Security deductions. Employers handle tax withholding using different methods. Bonuses alter taxable income and are shown in Box 1 of your W-2. Mastering IRS bonus tax rules is critical for optimized withholdings. Bonus tax rates vary and […]
