confused about base pay vs bonus pay

[peggyfromwastate]

Hi All- First off, Jenn congrats. I'm not sure if I'm a City Gal, but maybe I am, deep down there in my heart... I've only lived in medium sized towns, pretty far from the nearest "big city"...

Anyway, my question is this: I looked at the links posted by someone on another thread with bonus pay scales, and I noticed that the Medical Additional Special Pay is taxable? Are all the special bonus pays taxable? And is the MASP the same thing as the special bonus paid to residents after completing their residency? Or is that bonus to residents a one-time gift? Anyway, I guess that I was under the impression that only the base pay is taxable, but I see that I am wrong! 8O Could anyone shed some light? Thanks a lot!

Peggy

[mommax3]

Hi Peggy,

I am sure there are others who will answer this better than I, but I can tell you that the bonuses after residency ARE definitely taxed. I think what is not taxable is the payment you get if you don't live in base housing (I forget the acronym). Like I said, I am sure that others will be able to enlighten you (and me) on this issue.

Sally

[DCJenn]

I'll check and see about the bonus pay- it should be considered taxable income-

BAH and BAS are not taxable income. (Thankfully!)

Jenn

Yes, all the bonuses are taxed. The tax is taken "off the top" of the bonuses that are paid yearly; e.g. the MASP is a $15k bonus but you only get a check for $11k

[peggyfromwastate]

OK- Thanks for clearing that up!

Peggy

base pay vs. bonus pay

Yes, bonuses are definitley taxed and the the taxes do come off the top; however, keep in mind that the added income may (and probably will) jump you into another tax bracket. When we got our $15,000 bonus ($11,000 after taxes) when my husband did a GMO in Korea I thought it was great--until I was doing our taxes and almost fainted after determining the additional amount we owed. Just something to keep in mind as tax season approaches.

[peggyfromwastate]

Thanks again Shiela for the income- I'm dealing with a new tax bracket as it is now, even on our meager salary! My husband picked up some part time work in addition to his regular job as a medical interpreter! So this part time work has an added Self Employment tax, which I didn't figure on, and now we are gonna be living skinny for the next couple of months to PAY our taxes! After years of rebates, rebates, rebates... Sigh... Better get used to it, I guess, and thanks for the heads up--- something to think about most definitely!

Peggy