At the end of the year, many employees are often rewarded with bonuses -- extra payments designed to encourage and thank the employee for his hard work. These bonuses, although supplemental to a person's regular income, are taxed like regular income. For people in higher tax brackets, this can mean that as much as 40 percent of a person's bonus will be withheld from the bonus check before it is issued.
A bonus check differs from money culled from a salary in that the amount of the bonus is not set beforehand but is left to the discretion of the employer to calculate. While some employees are guaranteed "bonuses," these are not true bonuses but are a different from of pre-set compensation. Regardless of the amount an employee receives in bonuses, this money still counts as regular income.
Whatever an employee is paid, he is still subject to income taxes, whether the money is part of money he earns as part of his salary or as part of a special, one-time compensation, such as a bonus. Depending on the total amount of money that you're paid, then you will be placed in one of several tax brackets. People who make more money have their salaries taxed at a higher percentage.
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When a person receives his bonus check, the employer may have withheld a percentage of it according to the amount of money that he typically withholds from the employee. For example, if the employer typically withholds 40 percent -- which is not uncommon, given that the highest federal tax bracket in 2011 was 35 percent and the employer will likely withhold state and potentially city taxes, too -- this same amount will be taken out of the person's bonus check, too.
While you may have your bonus taxed at 40 percent, this does not mean that the government will get to keep all of this money. Rather, this money may eventually be returned to you in the form of a refund. You may be able to claim a number of deductions or exemptions that will prevent you from having to pay the full 40 percent. To determine what deductions you qualify for, contact an accountant.