Is my accountant WRONG?

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  • Is my accountant WRONG?


Answer #1 | 19/12 2013 19:04
You will be happy to know that yes, he is being taxed on it regardless if at the time he chooses to give a little more to his client in net pay by lessening their tax liability. There simply is no way that a person could deposit a check into their bank account without IRS knowledge somewhere down the road. Most likely at the end of the year...he is taking from his business checkbook what is called a shareholders distribution. If he is the president he owns all shares. Once a year, that person can take a check and it can be quite large and it need not be taxed. On the other hand, if he receives a bonus and does not immediately withhold taxes, then, he will pay the tax on it at the end of the year as well as any other monies that he has taken.
Answer #2 | 19/12 2013 19:37
Your question is confusing - if this is a bonus check paid from an employer to an employee = of course, it needs to be taxed like all other payroll checks. Additionally, like all other lump sum or special payments it needs to be taxed at the supplemental pay tax rate of 25% federal withholdings. If the company wants to give you a flat amount check, they can always do a gross up to determine the flat amount check. This means if they want you to get $1000, they can determine what the taxes would be for so that you can get the $1000 check. For example, it might be $1300 minus $300 taxes = $1000 for your hands, so you actually grossed $1300 on this check.

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