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How do i determine my tax bracket

how do i determine my tax bracket

25% federal, 6.2% social security (unless you've already hit the limit of 97,500 in social security wages), 1.45% medicare, and whatever your state rate is. It's a standard rate for the federal.

I attached a link to information regarding bonus' and immediately below is information from the link.

Two-tiered Federal Income Tax (FIT) Bonus Rate Support

Under the rules described in Publication 15 (Circular E), employers have the option of including bonus payments with regular wages and calculating the related tax on the total using the regular withholding tables or calculating the withholding tax related to the bonus separately using an alternate method. In previous years, one alternate method allowed by the IRS and supported by Signature was to simply apply

a flat rate to the gross bonus payment. When the flat rate alternative is used, no deduction for exemptions is permitted.

Beginning in 2005, the American Jobs Creation Act of 2004 requires bonus withholding using the flat-rate alternate method to be calculated at two rates.

Under the new Law, a rate of 25% applies to all earnings up to and including $1,000,000; a rate of 35% applies to all bonus payments in excess of $1,000,000 for the year

The rate of 25% is just for federal withholding, to that you need to add the 6.2% social security and 1.45% medicare, so with federal alone you are at 32.65% withholding. Then add your state withholding.

PepsiLime · 8 years ago

Category: Taxes

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