Hi,
I am a pediatric hospitalist in L.A. and I do extra shifts within my hospital every month. This moonlighting pay is added to my paycheck every month. Some friends have told me to get that bonus/moonlighting check in a seperate check so my monthly paycheck (income) is not increased and is thus not taxed at a higher bracket. Is there any truth to this? Isn't the tax bracket determined by your yearly income? Tax will be taken out of the bonus check along with my usual pay so will having them cut a seperate check really make a difference in how much tax I pay? Is the total tax on a $15,000 paycheck equal to the total tax on 2 seperate checks of $10,000 and $5,000 each?
thanks

Zip Code: abalkian@yahoo.com

Each year, you're taxed on your total income. So whether you receive a separate check for your moonlighting won't impact the taxes you ultimately pay for the year.

What people are telling you is that if you receive the moonlighting in a separate check, less taxes will be withheld from that check. But come April 15th next year, you'll either receive a smaller refund, or have a larger balance due, to reflect the reduced withholding.

Zip Code: aschwartz@mdtaxes.com