FINALLY GOT OUR BONUS MONEY KIND OF SAD THOUGH ON HOW MUCH TAXES YOU HAVE TO PAY THE GOVERMENT WHEN ITS OUR LAND. WE PAY THE PROPERTY TAXES AND WE PAID FOR OUR LAND. IM STILL GRATEFUL FOR THE MONEY JUST CANT UNDERSTAND HOW THE GOVERMENT HAS TO STICK THERE NOSE IN EVERYTHING.WE SIGNED BACK IN DEC 2011.
Congratulations and yes it is sad to have to pay taxes on that money like you have been rich all your life. Seems like the government wants to hold the commoner down.
The other thing to watch out for is getting hit by AMT the year after your signing bonus windfall. You will be back to your regualr income and if you itemize and deduct state and local income taxes you are almost sure to get nailed by AMT.
You can avoid/manage this by doing a tax projection now...and paying Ohio & local taxes before year end....match the decution with your income....this could save you a lot of money.
Taxpayers may still get nailed by AMT even by matching the state income tax deduction in the same year as the oil & gas bonus payment. For 2012, a lot of it depends whether or not Congress renews the AMT patch to increase the AMT exemption. If not, there will be a lot more individuals subject to AMT that were not subject to in the past.
The best thing to do as you mentioned is meet with a tax advisor to do a tax projection. This is something I regularly do for myself and my clients. There are planning opportunities that could help minimize the tax bite, but a person does not want to wait until December to start planning for them.
It's not true that you HAVE to make quarterly (estimated) payments for Federal - it depends on how much you paid (overpaid) the previous year. In Ohio you will get nailed for estimated payments.
Ours was pretty substantial. Our taxes were in 6 figures from the signing bonus.
I guess my point is that when making statements of "fact", one should distinguish between facts specific to ones specific situation and facts which are generally true.
As always, people should do their own due diligence and get advice from lawyers and accountants as appropriate.
WE WERE TOLD THE SAME THING THAT YOU ARE POSTING !
You may not have to pay either yet...depends on whether or not you are "protected" from penalties and/or interest. Seed the help of a good CPA.
My family is looking for a good CPA. Can you refer me to one?
I'm a CPA besides being a farmer. I just moved back to the area in November from a national firm outside of DC and I'm now working with one of the local area firms as their oil & gas expert. Driving back and forth from DC each weekend to farm was too much after 11 years, so I moved back home to the area. I would be happy to meet with you and your family if you're interested. I'm going through the leasing process myself, so I can relate to your family's situation.