If you received a bonus you may want to understand, “how taxes are withheld from your bonuses when you receive them?”
Reduce your taxes with a
personalized tax plan
Our experts review your unique situation and recommend proven tax strategies to lower your tax bill.
By selecting Learn More,
you will be leaving Intuit’s site.
At the time of receipt of your bonus, federal taxes are typically withheld by your employer at a higher tax rate than your actual tax rate used when you file your taxes. But don’t worry, since your actual tax rate based on your total taxable income for the year could be lower, you may get back some of what was withheld from your bonus as part of your federal tax refund.
Employers typically use either of two methods for calculating federal tax withholding on your bonus: the aggregate method or the percentage method. Generally most employers chose to use the percentage method. Under tax reform, the federal tax rate for withholding on a bonus was lowered to 22%, down from the federal income tax rate of 25%.
Check out our updated bonus calculator that answers one of our most frequently asked questions and get an estimate of how much federal taxes will be withheld from your bonuses when you receive them.
27 responses to “How Bonuses are Taxed Calculator”
Browse Related Articles
Source link
