hello forum,
I have a bonus income tax-related questions.
I'm a NYC resident with 2 Fed allowances. Income is $55k/year. I'm about to receive a $5000 bonus and was asked whether it should be calculated using "percentage method" (25% flat rate) or "aggregate method" (which would be a 39% rate given my 2 Fed allowances). I was told i would get more money now if I should the "percentage" method, but would have to pay more in taxes on 4/15. However, if I chose 'aggregate method', i would receive less in bonus but pay less on 4/15. Can somehow explain this to me please?
thanks