When the Tax Bullet Hits the Bonus

I am a single man living and working in New York City. For my normal paychecks, the total tax withheld is roughly 34%, including city, state, and Federal withholdings. I recently got a small bonus as part of my company's employee referral program and was taxed at a near 50% rate. Why do they insist on bilking me of a larger proportion of my bonus?

James Stevens

James,

No one is bilking you. This is perfectly legit. Just know that if you're expecting a midyear bonus, year-end bonus or any other kind of supplementary income, at least 28% of it will be withheld for federal tax purposes. That's just the way it is. ...