It's not a matter of losing money; it's a matter of losing certain tax benefits that exceed the value of the bonus. It's a very real issue for people who straddle various thresholds for credits, deductions, and other benefits.
For example, in the US once you make over $75,000 (before most deductions), you no longer qualify for student loan interest payment deductions. For someone making $74,000 before who receives a $2000 bonus, they lose out on the deduction--potentially worth significantly more in tax-adjusted terms than the gross amount of the bonus before taxes.
> For example, in the US once you make over $75,000 (before most deductions), you no longer qualify for student loan interest payment deductions. For someone making $74,000 before who receives a $2000 bonus, they lose out on the deduction--potentially worth significantly more in tax-adjusted terms than the gross amount of the bonus before taxes.
The student loan interest deduction (and this is true of most -- AFAIK, actually all -- deductions with an income cap) doesn't have a sharp cutoff, it has a phaseout -- you get the full deduction up to $60,000, and it is reduced continuously with income down to zero at $75,000.
At $74,000, the maximum student loan interest deduction is a $167 deduction (which, at that income, is worth $42 in reduced tax liability.) Even with a $1,000 bonus that takes you just to the cutoff, its not possible for the loss of the deduction to be "worth significantly more in tax-adjusted terms than the gross amount of the bonus before taxes". [1]
It's unfortunate that the system for paying taxes has become so complicated. It's no wonder that people complain about rich people exploiting tax-law. Whereas they simply have the inclination/money to hire accountants that do the books properly, and give them the advice they need to keep their affairs in perfect-tax working order.
For example, in the US once you make over $75,000 (before most deductions), you no longer qualify for student loan interest payment deductions. For someone making $74,000 before who receives a $2000 bonus, they lose out on the deduction--potentially worth significantly more in tax-adjusted terms than the gross amount of the bonus before taxes.