Discussion:Bonus
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Discussion Forum Index --> Basic Tax Questions --> Bonus
Discussion Forum Index --> Tax Questions --> Bonus
| 1 July 2008 | |
| I have a client that started a new company in July last year. Before he hired a payroll company he paid his only "employee" $2800 and called it a bonus. He did not withhold any taxes; give the guy a 1099 or a w-2. At this point is it better for him to give the guy a 1099? | |
| 1 July 2008 | |
| Grace, please complete your profile so we will have some idea of your background and experience. Just click on your name in one of your posts above. That will take you to your user page, where you can click on the "edit this page" tab at the top and replace the boilerplate with your own information, and save the page.
Has this corporation been profitable? Has the stockholder taken any distributions from it? | |
| 1 July 2008 | |
| call it a loan, and forgive the debt? Won't that amount to the same thing, it would be taxable to employee? i.e. forgive the 2007 debt in 2008. Employee would still end up with a 1099. Hehe, I am not the payroll guru. | |
| 1 July 2008 | |
| woops, that won't work, it's been already taken as a business expense: payroll. | |
| 1 July 2008 | |
| What year was the payment made, 2007 or 2008? If it was 2007, what did the employee do with it? Kinda late for a 2007 W-2. Or a 1099 for that matter. If the payment was in 2008 and the employee was always meant to be an employee the payment represents a net check and would need to be grossed up. Or deduct the taxes on the 2Q08 payroll and make the numbers work on the returns.
You gotta love "simple" payroll issues. | |
| 1 July 2008 | |
| Better a late W-2 and 941 etc for the 4th q of 07, so everything ties in. They won't forget nex time. | |
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