Finance

Where’s the rest? Why your year-end bonus or gift may have shrunk

Published

2 months ago

December 28, 2025

Where’s the rest? Why your year-end bonus or gift may have shrunk

Americans who are receiving a year-end bonus for a job well done may be sorely disappointed when they open their envelope to find a big chunk missing.

Up to a third of a cash bonus can get swallowed up by the IRS’ special tax withholding on cash bonuses, or what it calls “supplemental income,” on top of Medicare, Social Security and state taxes. The federal flat rate for bonus pay is 22% for supplemental income under $1 million. Add Social Security (6.2%), Medicare (1.45%), and state taxes, and total withholding is roughly 30%-35%.

“That 22% federal withholding might be higher than your…regular tax bracket,” according to workforce management software company Homebase. “If they usually pay 12%, seeing 22% disappear from their bonus stings.”

Why can this spell financial disaster for Americans?

For the holidays, many Americans may have spent like they were receiving the full amount of the bonus instead of the bonus amount minus taxes, said Kevin Knull, chief executive of TaxStatus, which provides IRS data to financial advisers.

The $10,000 bonus for air traffic controllers who had perfect attendance during the government shutdown isn’t really a $10,000 bonus, for instance. The withholding on bonuses is a flat 22%, plus a 6.2% Social Security tax and 1.45% Medicare tax. Those reduce the bonus to just over $7,000, and you may still have to have state income tax taken out.

“That’s all immediately deducted and goes to Uncle Sam,” Knull said. “Somewhere around 48% of the population underestimate what they pay in taxes. Income taxes take a big bite out of paychecks.” If you spent the entire ‘$10,000 bonus,’ you overspent by about $3,000.

Separately, Americans should be aware that a bonus can also bump them into the next higher tax bracket if they’re already close to it, experts said.

Some (belated) good news?

If the tax cost of your bonus is less than 22%, or the withholding rate, you’ll receive a tax refund for the difference, or it will be applied to the tax due on any other income, experts said. Bonuses will be taxed as regular income on the final tax return. You’ll just have to wait until you file your 2025 taxes next year to get the money back.

On the flipside, if the tax cost of your bonus is more than the 22% withholding rate, you’ll owe the difference between what was withheld and your total tax cost.

How can you keep taxes low with your bonus?

If you haven’t maximized your 401(k) or IRA contributions for the year, consider adding some of the money to your retirement fund to reduce overall taxable income come tax season, wrote Kay Bell at financial products comparison site Bankrate. Contrbutions are income tax-free, but withdrawals later are taxed.

The 2025 IRA contribution limit is $7,000, or $8,000 if you’re age 50 or older. The 401(k) limit is $23,500 and an additional $7,500 for age 50 or older except those who are age 60 to 63. Those individuals have a higher catch-up contribution limit of $11,250 instead of $7,500.

Or if you expect your income to be much lower next year, pushing your tax bracket lower, consider asking your employer to defer the bonus until then, she said. You’ll still owe taxes, but you could save money by paying at a lower tax rate.

“However, even if your tax bracket doesn’t change year to year, some like receiving bonuses next year just to move the tax liability to 2026,” said Richard Pon, certified public accountant in San Francisco.

What about non-cash bonuses or gifts?

“Employers and employees may be shocked that gifts are usually taxable,” Pon said.

Cash and cash-equivalent gifts and bonuses such as gift cards, season tickets to sporting or theatrical events and gift certificates are taxed, Pon said.

“Sometimes employers deduct this from the regular paycheck,” he said. “Other times, employers pay these taxes on your behalf and gross up the income, which can double the cost of a $25 gift card to $50 with taxes if an employer pays the employee share of taxes…you should check your paystub to see if you are taxed.”

A couple of exceptions exist. The first is the “conduit gift,” which is a contribution made to an intermediary organization that then passes the funds to the final intended recipient. For example, if the parent teacher association (PTA) collected and gifted cash or gift cards to staff and faculty, those are conduit gifts and wouldn’t be taxed. The PTA was merely a conduit for gifts paid by parents.

Another exception is if a manager personally gives an employee a cash gift or gift card, Pon said. “That is a personal gift. It’s not a gift from your employer,” he said. Since the manager is “not the employer, those would be tax-free gifts to the recipients.”

He warned though those gifts may cause other frictions at work. “There are a lot of scrooges,” Pon said. “I once worked in an accounting firm and the managing partner complained I was giving gift cards and candy to our admin staff as a token of appreciation of helping me all year. The partner said I was making other managers seem unkind if they didn’t give out gifts.”

Noncash gifts like hams, turkeys, an occasional ticket to a sporting event or theatrical event are considered a “de minimis fringe benefit,” which is not taxable, Pon said. But note, a coupon or gift card intended to buy a turkey, ham or other item may be taxable, he said.

Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.

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Finance

Bluespring adds $2.3bn in assets with SHP Financial purchase

Published

17 hours ago

February 11, 2026

Press Room

Bluespring adds .3bn in assets with SHP Financial purchase

In 2025, Bluespring added over $6bn in assets under management to its business. Credit: Digitala World/ Shutterstock.com.

Bluespring Wealth Partners has purchased SHP Financial, a firm based in Massachusetts that manages about $2.3bn in assets for mass-affluent and high-net-worth clients.

Financial specifics of the deal remain undisclosed.

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SHP Financial was established in 2003 by Derek L. Gregoire, Matthew C. Peck, and Keith W. Ellis Jr., who began their financial careers together in the insurance sector.

The company employs around 50 staff across three offices in Plymouth, Woburn, and Hyannis. Its team includes seven advisers and 18 other financial services professionals.

The firm is known for providing fiduciary advice and offers services such as its SHP Retirement Road Map, aimed at making retirement planning more accessible to clients.

Peck said: “We are deeply protective of the culture we’ve built over the last two decades and were intentional about choosing a partner we felt could help us fuel SHP’s next stage of growth while helping us remain true to our goals.

“And we found that partner in Bluespring. We believe Bluespring can provide the resources and support needed to grow and invest in our team, while preserving the client experience that defines SHP.”

In 2025, Bluespring added over $6bn in assets under management to its business.

Bluespring president Pradeep Jayaraman commented: “SHP is a team that has already built meaningful scale and is still hungry to grow. That’s what makes this an acceleration story, as opposed to a transition story.

“SHP’s founders are seasoned leaders in the prime of their careers, still deeply engaged in their business, with decades of success yet ahead.

Last month, Bluespring added Coghill Investment Strategies, managing around $600m in assets, to its network.

Finance

Oregon Democrats’ campaign finance proposal would establish spending limits, push back other provisions

Published

1 day ago

February 10, 2026

Press Room

Oregon Democrats’ campaign finance proposal would establish spending limits, push back other provisions

The Oregon State Capitol in Salem, Ore. on Monday, Feb 2, 2026.

Saskia Hatvany / OPB

State leaders are trying to stand up a law to massively overhaul Oregon’s campaign finance system.

Now, two years after the original bill’s passage, a new proposal would limit political contributions before the next general election as planned, but give the Secretary of State more time to launch a required system to track spending.

An amended bill, unveiled Monday evening, is shining a spotlight on the divide between the politically powerful labor and business groups who support it and good government advocates who are accusing state leaders of trying to skirt the intent of the original legislation.

House Bill 4018, which saw its first public hearing Tuesday morning, comes as state officials seek to prop up the campaign finance bill passed in 2024. Since then, state leaders have been jockeying over how best to quickly set up the bill for Oregon’s elections. For years, the state has not capped political giving.

State elections officials have warned repeatedly that the legislation from 2024 was flawed and that Oregon was barreling toward a failed implementation. The Oregon Secretary of State says it needs far more money — potentially $25 million — to keep things on schedule.

In addition to a dizzying array of technical changes, the new bill gives the state more time to create an online system to better monitor and track political spending and giving. It would move the start date from 2028 to 2032.

The bill maintains the original plan of capping political donations by businesses, political committees, interest groups, labor unions and other citizens by 2027.

“If our goal is to strengthen trust in democracy, we cannot afford a rollout that undermines confidence in government’s ability to deliver,” Oregon Secretary of State Tobias Read said in testimony supporting the bill on Tuesday.

“Oregonians deserve campaign finance reform that works, not just on paper, but in practice,” said Read. “They deserve a system that ends unlimited contributions. HB 4018 is a step closer to achieving that goal by preserving the key contribution limits promised to Oregonians while providing a realistic runway for the state to resolve the more complex reporting and transparency issues.”

Rep. Julie Fahey (D-Eugene), right, and Rep. Lucetta (R-McMinnville) attend a legislative preview for the press on Wednesday, Jan. 28, 2026 in Salem, Ore.
*Saskia Hatvany / OPB*

House Speaker Julie Fahey, who proposed the bill, believes it “addresses the most urgent needs of our campaign finance system,” a spokesperson for the Lane County Democrat said. For the tracking system, the bill “will give the Secretary of State the time needed to build it carefully, test it thoroughly, and roll it out without risking problems in the middle of a major election.”

The bill has the backing of labor groups such as the Oregon Nurses Association, Oregon AFSCME, Oregon AFL-CIO and the Oregon Restaurant & Lodging Association. Republican leaders have yet to chime in.

“Oregon is fighting hard for a transparent, robust, and intact democracy against a challenging national landscape from federal threats and corporate power. Fair elections are the foundation of this,” said Harper Haverkamp, of the American Federation of Teachers — Oregon. “The upcoming rollout of recently passed campaign finance reforms is something for us to look forward to — but the rollout must be done right.”

Campaign finance advocates offered a withering view of the proposal on Tuesday, saying they were excluded from discussions around crafting the bill and calling on lawmakers to reject the bill. In written testimony, one of them urged lawmakers to “Stop kicking the can down the road.”

The bill “massively changes [the 2024 bill] to come very close to making the contribution limits and disclosure requirements illusory,” Dan Meek, a Portland attorney and campaign finance reform advocate, said in Tuesday’s public hearing.

Among other things, he added, the bill would delay disclosure requirements by three years. It would also only restrict a group’s contribution to a campaign if the Secretary of State’s office determined that a single person had created them with the intent of evading limits, “which will be very difficult to prove,” he noted.

“This is another stealth attempt by legislative leadership and the big campaign contributors to do an end run around on campaign finance reform, before it’s set to be implemented,” Kate Titus, the executive director of Common Cause Oregon, said in a statement to OPB Tuesday.

The bill is scheduled for another public hearing on Thursday.

Finance

Finance Chiefs Struggling to Deliver in Face of Growing Pressure to Embrace AI

Published

2 days ago

February 10, 2026

Press Room

Finance Chiefs Struggling to Deliver in Face of Growing Pressure to Embrace AI

Latest research from Basware shows majority are investing in technology, but ROI remains elusive

CHARLOTTE, N.C., Feb. 10, 2026 /PRNewswire/ — Calls from boards of directors and executive leadership to “do something with AI” are growing louder, and finance is struggling to answer them. According to a new report from Basware, a global leader in Invoice Lifecycle Management, nearly half of CFOs say they feel increased pressure from company leadership to implement AI across their operations. And while many are investing in agentic AI in response, a majority admit they are largely experimenting with the technology and flying blind when it comes to putting it into practice and delivering ROI.

As revealed in AI to ROI: Unlocking Value with AI Agents report, a global survey conducted by FT Longitude with support from Basware, six in ten (61%) of 200 finance leaders across the US, UK, France and Germany polled say their organization rolled out custom-developed AI agents largely as an experiment, simply to see what the technology could do. And one in four admit they still don’t fully understand what an AI agent looks like in practice.

It’s a vexing problem, and as they look to the year ahead, CFOs need to focus on solving it.

The Rise of Agentic AI

Two-thirds (66%) of respondents to the Basware survey say there is more hype around agentic AI than any previous technology shift, yet three-quarters are still figuring out the best way to leverage it. And the C-Suite is losing patience.

“We’ve reached a tipping point where boards and CEOs are done with AI experiments and expecting real results,” said Jason Kurtz, CEO, Basware.

And as the Basware research makes clear, agentic AI is the key to delivering them. While overall AI return on investment (ROI) rose from 35% to 67% in the last year, survey data shows agentic AI far – and companies using third-party solutions already embedded with AI agents – outperformed all categories with an average ROI of 80%.

Scoring Easy Wins

“Finance teams that focus on areas where AI can have immediate impact, such as automating accounts payable, improving compliance, reducing errors, and detecting fraud, can deliver these results,” Kurtz adds.

Respondents to the Basware survey confirm this, with 72% saying they see accounts payable (AP)—often the most manual and data-heavy part of the finance function—as the most obvious starting point for agentic AI. And it’s an area where Basware can deliver quick wins. At the end of the day, AP is a data problem. and Basware is solving it with AI. Over the last 40 years, the company has built the industry’s largest set of structured, high-quality AP data and processed more than two billion invoices. And it’s applying AI to this data to train its AI agents and deliver context-aware predictions, enabling finance teams to spend less time analyzing and more time deciding and acting. Other areas where they will likely deploy agentic AI:

Automating invoice capture and data entry (30%)
Cash flow management (24%)
Scenario modeling and forecasting (23%)
Lower operating costs (21%)
Running real-time risk and market analysis (20%)
Automating financial reporting and reconciliations (20%)
Streamlining compliance checks and regulatory filings (19%)
Detecting duplicate invoices or potential fraud (19%)
Reducing overpayments or duplicate payments (18%)

Build Vs Buy

Organizations that leverage intelligent platforms like Basware’s Invoice Lifecycle Management that are embedded with agentic AI and uniquely designed to drive these processes can deliver the results they’re leadership is expecting with greater speed and cost efficiency than cobbling together point solutions or attempting to build their own.

Take InvoiceAI, a solution delivered on the platform that intelligently and securely applies generative and agentic AI, natural language processing and deep learning across the entire invoice lifecycle. Leveraging embedded AI Agents, the solution goes beyond simple automation to autonomously processes invoices and deliver game-changing improvements in speed, accuracy and compliance.

From Hype to Reality – and ROI

But achieving these results requires clear strategies and governance to drive them.

According to the Basware survey, nearly three quarters (71%) of finance teams seeing the weakest returns from AI reported acting under pressure and without direction, compared to 13% of teams achieving strong ROI.

“Our research confirms what we see every day: AI for AI’s sake is a waste,” Kurtz said. “Agentic AI can deliver transformational results, but only when it is deployed with purpose and discipline. And that means embedding AI directly into finance workflows, grounding agents in trusted data, and governing them like digital employees. This is how AI moves from innovation to impact. And this is what Basware delivers for our customers.”

To learn more about Basware’s Invoice Lifecycle Management platform and the value it is delivering to enterprises around the globe, click here.

About Basware

Basware is how the world’s best finance teams gain complete control of every invoice, every time. Our Intelligent Invoice Lifecycle Management Platform ensures end-to-end efficiency, compliance and control for all invoice transactions. Powered by the world’s most sophisticated invoice-centric AI – trained on over 2 billion invoices – Basware’s Intelligent Automation drives real ROI by transforming finance operations. We serve 6,500+ customers globally and are trusted by industry leaders including DHL, Heineken and Sony. Fueled by 40 years of specialized expertise with $10+ trillion in total spend handled, we are pioneering the next era of finance. With Basware, now it all just happens.

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Logo: https://mma.prnewswire.com/media/2398888/Basware_logo.jpg

SOURCE Basware