Heavily Than Regular Pay Or Why They Deducted So Much For Federal Taxes?

Q: this month, in addition to my usual paycheck, I received a bonus for roughly the same amount of my gross pay for the pay period. However I noticed that the deduction of Federal Income Tax was 3 times the usual deduction from my paycheck. Do you know whether incentive pay is taxed more heavily than regular pay or why they deducted so much for Federal Taxes? I was thinking about complaining but maybe there is some IRS regulation that I am not aware of and I would look like a fool.

A: -From my experience (and I'm not an experience tax-person), I think that would qualify to be taxed in the 40%(+/-) range. My bonus this year was a meager $500 before taxes and after taxes was only $280-ish... they can hammer that (I think it is b.s., but they can) -No, I think what happened is that, being a salaried employee, your regular paycheck has federal income tax deducted which is a combination of several tax brackets. Because you were given a bonus, this additional taxable income for the year is added ON TOP OF all existing income and is taxed at YOUR TOP MARGINAL RATE. For example, say you earn $1,000 a week ($52,000 a year). Your weekly $1,000 paycheck will be reduced by, say, $180 in federal tax. Although that $180 represents 18% of your paycheck, it would be erroneous to think that you are in an "18% bracket". In reality, that $180 represents perhaps 2 or even 3 different brackets. But if you ADD income to the already existing $52,000 earned in

the year, all additional income is taxed at your highest bracket, which may be the 28% bracket. Now, some of the $52,000 you already earned was taxed at 28% but never appeared like that because it was "buried" with lower tax brackets in the $180 regularly taken off each week. But you were, nevertheless, in the 28% bracket before you received 1 cent of the bonus. To make it even MORE confusing, there is an addition 8.5% taken off for social security! I know it all sounds convoluted but, hey, that is our progressive tax system: confusing. Indeed, if people understood how much of each marginal dollar was taxed, I am convinced there would be rioting in the streets!