Community Chat

[terrier3]

On 7/23/2014 Marp2 said:

Congratulations mcall. I'd like to suggest that BEFORE you collect the money you consult with an accountant to see how you can minimize or defer taxes.

You can't defer taxes on a one time payment. I'm sure he will be classifying it as a bonus. If it was a gift, the boss would also owe gift taxes because it is over the annual limit. As a bonus, he can claim it as a business expense.

I used to get a one time bonus if I made 110% of my budget the year before. It was taxed just like any other income.

So what? She still is far ahead!

[stilltamn8r]

You obviously know him very well after 33 years- you said he would take care of you and he did! You certainly deserve it! Best of luck with the next phase of your life!

[KathyPet]

Wow! what a great boss!

[Qwackertoo]

I don't recall when your last day is . . . but depending on IF you work through Oct or Dec 31 or whatever that last date is . . . IF you do not plan to work anymore . . . IF he cut the check and dated it AFTER 1-1-15 . . . IF possible . . . that would lower your net tax liability . . . spreading your earned income to date from 2014 to be taxed in 2014 and your "severence/bonus/retirement" to be paid and taxed in 2015.

That is just one possibility.

Again, congrats and you might also look for severence/bonus tax calculators. There is also some info where they say employers can tax it at a flat 25% rate. I know times when we've received a huge bonus . . . sometimes as much as 1/3 or more gets eaten up with taxes taken out resulting in usually an over payment when we "adjust" with changing our W4 claimed dependents . . . taking care to do so within the letter of the law . . . of course.

[CardinalGirl]

Congratulations!

[terrier3]

On 7/23/2014 Qwackertoo said:

I don't recall when your last day is . . . but depending on IF you work through Oct or Dec 31 or whatever that last date is . . . IF you do not plan to work anymore . . . IF he cut the check and dated it AFTER 1-1-15 . . . IF possible . . . that would lower your net tax liability . . . spreading your earned income to date from 2014 to be taxed in 2014 and your "severence/bonus/retirement" to be paid and taxed in 2015.

That is just one possibility.

Again, congrats and you might also look for severence/bonus tax calculators. There is also some info where they say employers can tax it at a flat 25% rate. I know times when we've received a huge bonus . . . sometimes as much as 1/3 or more gets eaten up with taxes taken out resulting in usually an over payment when we "adjust" with changing our W4 claimed dependents . . . taking care to do so within the letter of the law . . . of course.

Her boss is giving her a generous bonus.

He will want to use it as a tax deduction (business expense) in the year in which he owned his business - which he is closing soon.

SO WHAT if she pays a little more in taxes? What's so bad about being in a slightly higher tax bracket?

If you won $33,000 in the lottery, wouldn't you be grateful for the extra income.

You are all looking at what she won't get out of the bonus...not what she WILL receive. The glass is more than half full folks!

[magicmoodz]

mccall, I am so happy with this outcome! Proof of what an asset you have been to the firm!

Happy days ahead! What are you going to buy?

[Qwackertoo]

On 7/23/2014 terrier3 said:

On 7/23/2014 Qwackertoo said:

I don't recall when your last day is . . . but depending on IF you work through Oct or Dec 31 or whatever that last date is . . . IF you do not plan to work anymore . . . IF he cut the check and dated it AFTER 1-1-15 . . . IF possible . . . that would lower your net tax liability . . . spreading your earned income to date from 2014 to be taxed in 2014 and your "severence/bonus/retirement" to be paid and taxed in 2015.

That is just one possibility.

Again, congrats and you might also look for severence/bonus tax calculators. There is also some info where they say employers can tax it at a flat 25% rate. I know times when we've received a huge bonus . . . sometimes as much as 1/3 or more gets eaten up with taxes taken out resulting in usually an over payment when we "adjust" with changing our W4 claimed dependents . . . taking care to do so within the letter of the law . . . of course.

Her boss is giving her a generous bonus.

He will want to use it as a tax deduction (business expense) in the year in which he owned his business - which he is closing soon.

SO WHAT if she pays a little more in taxes? What's so bad about being in a slightly higher tax bracket?

If you won $33,000 in the lottery, wouldn't you be grateful for the extra income.

You are all looking at what she won't get out of the bonus...not what she WILL receive. The glass is more than half full folks!

I SAID I don't recall exact date of closing . . . IF it were 12/31 . . . I'm sure he would have more expenses rolling in after that date . . . to pay . . . I also said WITHIN THE LETTER OF THE LAW . . . the is absolutely nothing wrong with strategic planning to lessen ones tax burden . . . there is good in multiple options and opinions so she can PLAN. Geez Louise. Chill Terrier.

[Preds]

That's wonderful that he appreciates all that you did for him! Enjoy your bonus and your retirement. I'm sure you both will miss each other so hopefully you can stay in contact.

[RedTop]

This is a great way to start your retirement! Enjoy and be happy!