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This discussion was created by GMontag (42283) for no Foes, but now has been archived. No new comments can be posted.

Stupid money grabbing feds More

Stupid money grabbing feds

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  • Last night on my way out of work I stopped by a 7/11 and noticed the guy in front of me had quite a few "anti liberal" bumper stickers. (Mind you, this was in Cambridge, the most lefty-ist community on the east coast) The best was "Keep Working: Welfare needs you!"
  • No matter what my total income for the year, or the size of the bonus, I've ALWAYS had a good 40% of bonus money withheld in taxes. I've NEVER been in a 40% marginal tax bracket, so I have no idea how they come up with that level of withholdings for bonus money, but it's always been that way.

    For most people, bonuses are the time they ever realize just how much they pay in taxes. When they are told they are getting a $1000 bonus, but the check that's cut is actually for $750, then it hits them like a ton o

    • Re: (Score:2)

      by ncc74656 ( 45571 ) *

      For most people, bonuses are the time they ever realize just how much they pay in taxes. When they are told they are getting a $1000 bonus, but the check that's cut is actually for $750, then it hits them like a ton of bricks.

      If more people did a stint as an independent contractor at some point in their careers, that'd do an even better job of driving the point home. 1099 income has no tax withheld, so you get to cut checks to the IRS every quarter. When you're writing $1000+ checks on an income of may

  • It's a little over 40% for me. And like eglamkowski, I'm in nowhere near that kind of tax bracket. But the govt. sees this ginormous amount go thru in one pay period, and say OMG this guy just got one helluva raise and is rich now, we need to start really soaking him. Possible solutions:
    1) Bonus amounts could be given out gradually, over many pay periods. This would lessen the shock, but both kinds, the good and bad.
    2) We could be paid it under the table, like my first dot-com did. (BTW, not recommended for
  • Bonuses, all bonuses, get taxed at the highest tax bracket, regardless of other income. Unless the bonus is paid out in the form of stock options, in which case they get taxed either as normal income or as capital gains, depending on when they're sold (they have to be exercised and held first to count as capital gains, if you exercise and sell them the same day, it counts as "normal" income). Just one of of many ways the government screws you.
  • Bonuses always get taxed at a super special higher rate as they don't work out nicely in the tax tables. I suppose this could translate to getting more back at tax time but the Feds get a nice interest free loan in the mean time.

    Additionally, you can't take any 401k portion out of a bonus.

    But hey, don't despair, it's not that withholding that is going to really screw you, it's the AMT that will truly suck.

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