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New Member
posted Feb 28, 2021 1:26:37 PM

What are the benefits of reporting a bonus separate from income?

How does reporting a bonus separate from income affect my taxes?

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2 Replies
Employee Tax Expert
Feb 28, 2021 2:52:12 PM

It doesn't. The bonus is income just like your wages. 

 

An employer might benefit by reporting the bonuses separately and apply the same tax rate to all the bonus checks. That way all the employees (that earned the same bonus) will have the same dollar amount on their bonus checks. The employer doesn't need to explain to Sally why Sue's check is bigger because Sally has more withholding requested on her W4. 

 

But for the employee, bonus income is grouped with wage income on their tax return. 

Level 15
Feb 28, 2021 2:57:51 PM

It's not optional how you report bonus income.

 

What makes you ask that question?  Was you bonus reported to on  a separate document than your W-2 (a 1099-NEC or 1099-MISC)?