Employee Bonuses - What's the Bottom Line?
A bonus is an important way to recognize and reward valued employee contributions without increasing the overall level of salary costs to the company. However, it is important to keep in mind that the net value of a bonus is reduced when an employee is required to pay income taxes on the benefit.

Due to this tax factor, many companies pay bonuses along with additional money to help cover the cost of the income tax. This arrangement is commonly referred to as a "double bonus." For example, suppose a company pays a bonus of $6,500 to a key employee. With income tax to pay, this is not what the employee will actually receive. Assuming the employee's combined federal and state income tax rate is 41% (35% federal and 6% state), the tax on the $6,500 would be $2,665, leaving only $3,835 for the employee. If the corporation wants the employee to receive $6,500 free and clear, the bonus will have to be $11,016. This is calculated as the desired net bonus divided by 1 minus the tax rate or $6,500 - (1.00 - .41)).

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Welcome to Dougherty & Associates

At Dougherty & Associates, our purpose is to guide you to a more secure future. We look at every possible way to help you maximize all you've achieved in life. We offer a full range of wealth advisory services designed to help satisfy your personal financial needs.

You've succeeded in so many ways. You've "made it" - on paper at least. But still you wonder, "Is it enough?" "Could I do better?" "Is this the best I can do for my loved ones?" You need to know the answers. Because there are as many ways to enjoy what you've built as there are potential missteps that can cripple your financial future.

We believe that it's not only our responsibility to help you make the most of your income and assets, but also to help you make the most of your life. It's our plan for your future.

Put Your Future in Capable Hands

A financial advisor you can trust; an organization you can count on. With Dougherty & Associates, you get both. Here's how we work:

  • We identify your needs and objectives.

  • We fully analyze and evaluate your personal situation.

  • We give you input and advice to help you make timely, informed decisions.

The benefits of this approach are obvious. You gain a greater appreciation of your financial situation and the impact that various options can have on the financial well-being of you and your family. This places you in a better position to make wise decisions, and makes implementation much easier.

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