Q:

How is a signing bonus taxed?

A:

Quick Answer

A signing bonus is taxed at the recipient's marginal tax rate. This means that a large part of the bonus goes to the federal and state government.

Continue Reading

Full Answer

Businesses offer signing bonuses to prospective employees to attract them to join the company. The bonus is often issued in one or two lump-sum payments and may also consist of stock options. These bonuses are offered to highly qualified candidates as an incentive to accept a position that may also be offered by another company. In most cases, quitting after a short time after accepting a position means that the employee has to return the bonus in total or in part.

Learn more about Income Tax
Sources:

Related Questions

  • Q:

    How do you calculate your tax refund?

    A:

    To calculate your tax refund, list all income items, subtract all deductions, apply the appropriate tax rate, and then determine if the amount already paid or withheld is greater than the amount owed, notes Rick Suttle for the Houston Chronicle. If the amount already paid or withheld is greater than the amount owed, the taxpayer is entitled to a refund.

    Full Answer >
    Filed Under:
  • Q:

    What is federal rate of taxation on monetary gifts received?

    A:

    The federal gift tax rate is 40 percent as of tax year 2014, according to TurboTax. However, taxpayers can give up to $14,000 per recipient per year without triggering the gift tax. The recipient is not responsible for income tax on gifts of $14,000 or less.

    Full Answer >
    Filed Under:
  • Q:

    What are the different income tax brackets?

    A:

    As of 2015, there are seven tax brackets in the United States based on applicable tax rate percentages: 10, 15, 25, 28, 33, 35, and 39.6, states Bankrate. The rate of tax at the federal level is graduated, meaning those with a higher income have a higher tax rate than those with a lower income.

    Full Answer >
    Filed Under:
  • Q:

    What is the unemployment tax rate in California?

    A:

    As of 2015 the unemployment tax rate in California for new employers is 3.4 percent for two to three years; 6.2 percent is the highest rate for all employers, according to California's Employment Development Department. Employers do not pay more than $434 per employee per calendar year.

    Full Answer >
    Filed Under:

Explore