• Be sure your bonus checks are subject to the correct deductions.money in hand image by Bruce MacQueen from Fotolia.com
  
  If you receive bonus checks from your job, it is important to know what deductions should be made. Insufficient withholding can cause you to owe a lot of money at the end of the year in taxes, and too much money coming out of your check can be a hassle. If you wondering what should be deducted from your bonus check, make sure your employer issues you a bonus check separate from your regular payroll check.
  
  

Make Sure Your Bonus is Separate

• Bonuses can be taxed at a higher tax rate, and they can push you into a higher tax bracket, so to compensate for that the deduction is generally higher. To make sure that the right amount of taxes are being withheld from your bonuses, make sure that the bonus is a separate line on your paycheck. You don't want your regular salary or your commission to include the bonus as this can complicate things at tax time.
  
  

Deductions at the Percentage Method

• The percentage method of deductions for a bonus check is not generally favorable to the average taxpayer. With this method, 25 percent is withheld at the federal level and a flat state tax percentage that depends on your state is also withheld.
  
  

Deductions at the Aggregate Method

• In most states, you can use the aggregate method for bonus deductions. With this method, your tax is withheld based on your wages and your tax withholding to-date. So it will be calculated just like a regular paycheck. For this deduction, however, there can be less withheld than you actually will owe in taxes.