If I get a bonus at the end of the year will the same amount of taxes be taken out of the bonus as usual? Also, I had heard that if you work for your parents at own their own corporation than you could be exempt from paying Social Security and Medicare taxes. What would the pros and cons for doing this??

Thanks to everyone for their help!

Michelle

Depending on the size of the bonus, you most likely will have taxes withheld at 25%.

I don't believe that you would be exempt from SS taxes if you work at your parent's corporation. As long as someone is paying you a salary or an hourly wage, they should be deducting SS and Medicare taxes from your paycheck, and contributing their additional 6.2%.

If the child is working for the parents under either a sole proprietorship or a partnership AND the child is under the age of 18, NO Social Security or Medicare taxes are due.

This rule does NOT apply if the employer is a corporation, because the corporation is a SEPARATE TAX ENTITY.