BUISENESS MANAGEMENT
TAXES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Bonus given to a salesperson for making the most sales during the month
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Taxable
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Nontaxable
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -Ans. Bonus is taxed under the “income from salary” head.
Detailed explanation-2: -When a bonus is declared by the employer, it is considered taxable in the financial year in which it is declared even though you might receive it in the next financial year.
Detailed explanation-3: -While bonuses are subject to income taxes, they don’t simply get added to your income and taxed at your top marginal tax rate. Instead, your bonus counts as supplemental income and is subject to federal withholding at a 22% flat rate.
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