The Best Way To Use Your Bonus (Hint – Minimize Taxes)

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One of the great perks of being a corporate stooge is that many of us are eligible for some type of annual bonus.  Most folks take their bonus money and run, choosing to treat themselves with it, sometimes burning up the money before the check actually clears.  Personally, I prefer to put that money to work and to use it to push myself closer to my early retirement goal. Most of us know blowing the money on a new purse is not the best use of it.  What can we do to make smart use of that additional income? How Is A Bonus Taxed? First, we need a basic understanding of how a bonus gets taxed in order to fully utilize it. A bonus is considered supplemental income, which is compensation received on top of ordinary earnings.  Your regular paycheck is considered ordinary income. Ordinary income is taxed based on Continue Reading →