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Is bonus money taxable?

turbotax.intuit.com - How Bonuses Are Taxed - TurboTax Tax Tips & Videos - Intuit

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Make Your Bookie Cry And Pull The Hair By Generating $23,187

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OVERVIEW

Working hard all year to help your company meet its annual goals deserves a reward, and you've definitely earned that bonus. But bonuses count toward your income for the year, so they're subject to income taxes. Read on to learn how much tax you can expect to pay on your bonus—and for tips on reducing your tax liability.

Federal and state taxes

While bonuses are subject to income taxes, the IRS doesn’t consider them regular wages. Instead, your bonus counts as supplemental wages and can be subject to different federal withholding rules. How much your employer withholds from your bonus depends on several factors, but generally if your bonus is equal to or less than $1 million, your bonus will be subject to a 22% withholding flat rate. Example: If you receive a $6,000 bonus for the year, you'll likely have $1,320 withheld in federal taxes to be sent to the IRS ($6,000 x .22 = $1,320). Your bonus may also be subject to state taxes, although the withholding rate will vary depending on your state. If you receive a very large bonus—over $1 million—you'll have 22% federal tax withheld on the first million, then 37% on bonus funds above the first million. Example: If you received a $2 million bonus, you'd pay $590,000 in federal tax withholding.

$1,000,000 x .22 = $220,000 tax on first million

$1,000,000 x .37 = $370,000 tax on second million

$220,000 + $370,000 = $590,000 total tax

Other Tax Liabilities In some cases, you might have additional tax liabilities on the income from your bonus. For example, you'll likely have to pay: The 6.2% Social Security tax on all of your wages including your bonus that falls below the $147,000 Social Security cap for tax year 2022.

The 1.45% Medicare tax.

Meeting your tax liabilities When it comes to actually paying taxes on your bonus, your employer has two options: the percentage method or the aggregate method. The percentage method is simplest—your employer issues your bonus and withholds taxes at the 22% flat rate—or the higher rate if your bonus is over $1 million. The aggregate method is used when your employer issues your bonus with your regular salary payment and uses the total amount to calculate the amount of withholding. For example, if you normally withhold 35% of your pay for income taxes, the amount of withholding on your bonus would also be 35%. Using the aggregate method doesn't mean that you actually have to pay more tax on your bonus. You'd likely qualify for a refund for withholding too much tax money. But it does mean that you could see less of the cash from your bonus upfront. Use this bonus taxation calculator to figure out how much tax you'd pay on the amount of your bonus using either method, so you can know exactly how much money to expect.

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How do you explain what are the odds?

psychscenehub.com - What is an Odds Ratio and How do I Interpret It? - Psych Scene Hub

Odds Ratio Time to read: 2 minutes Time to read: 2 minutes

Odds of an event happening is defined as the likelihood that an event will occur, expressed as a proportion of the likelihood that the event will not occur. Therefore, if A is the probability of subjects affected and B is the probability of subjects not affected, then odds = A /B. Therefore, the odds of rolling four on dice are 1/5 or an implied probability of 20%. [Note this is not the same as probability which would be 1/6 = 16.66%] Odds Ratio (OR) is a measure of association between exposure and an outcome. The OR represents the odds that an outcome will occur given a particular exposure, compared to the odds of the outcome occurring in the absence of that exposure.

Important points about Odds ratio:

Calculated in case-control studies as the incidence of outcome is not known

OR >1 indicates increased occurrence of an event

OR <1 indicates decreased occurrence of an event (protective exposure)

Look at CI and P-value for statistical significance of value (Learn more about p values and confidence intervals here) In rare outcomes OR = RR (RR = Relative Risk). This applies when the incidence of the disease is < 10% If you are interested in doing a full research and statistics course for critical analysis/ appraisal then click here. Also, don’t forget to download our free critical appraisal worksheets to analyse research papers.

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