All credit to Chron-Houston #1 Receiving a bonus check is exciting. A bonus validates your performance as exceeding expectations. You earned it. You start thinking of all the ways you want to spend the money until you open the pay envelope. For individuals unaware of the taxation laws, the after-tax net amount can be a bit of a disappointment. Federal and state tax deductions affect a bonus regardless of your income level. #2 Paying out bonuses to your employees can be an effective motivational tool, and if you operate your business through a corporation, the good news is that bonus payments are generally tax deductible. Wonderful!...if you are ABF! Motivate us to vote yes and get a tax deduction...brilliant! Again depending which state you're in it's roughly 550$ you'll get. Hey maybe that's all you think you are worth...and you might be right!