Seen a few comments that sign on bonuses are not taxed as highly as people traditionally assume - any resources on figuring out how exactly my signs ons would be taxed? (Lump sum for year 1, added per paycheck for year 2)

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First step is understanding the difference between tax withholding and actual tax rates

Your sign on might be withheld higher than normal income, but you will get some of it back

likesmart

EY1 - if you read through the article you just linked, each example talks about the withholding rate. They even state as much verbatim “Whichever method your employer uses, your final income tax will be based on your total taxable income for the year when you file your federal return. You'll receive credit for all the income tax withheld from your pay, including your bonus.”

OP - EY1 is partially correct here in that 22% is the most common withholding rate for bonuses. If that’s more than your marginal rate, you can expect a little back when filing your taxes. If it’s less, plan on owing some (or getting less of a refund) come tax day.

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