I would like to hear some advice from others who have received their signing bonuses, as to the best ways to minimize and/or defer the taxes due.  Thanks in advance for your feedback.

Bob Ellis

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Good Luck,  I ended up paying close to 1/3 of my check in Federal and State.  Ohio was 15%  But pay it on time because they will fine you for late pay.  When you get the bonus money there is a filing deadline on that part separate from your other income taxes.  

IRS:  How much bonus money did you receive this year?

Me: $xxx.xx

IRS:  Give it to us.  :)

How on Earth was Ohio 15%?  That's more than double the top rate.  Did you take this to someone at H&R Block or something?

in PA i was told to pay 28% to federal (could be 33% if i make more than i usually do and puts me in a different tax bracket) and a little over 3% to PA. It is all lumped in to your total yearly earnings. The only difference is the bonus money is considered rental income so you do not pay SS and medicare on it.

I did unfortunately and I believe it may have been a mistake however, when I went back to file my income taxes, is when I found out I still owed the state more money and they were trying to fine me for filing late.  Any suggestions to get some of it back?   

I believe that the above response is incorrect.  Please consult a good CPA.

Angela, What makes you say that

The top tax rate for Ohio in 2012 is 5.925%.  The payment of federal estimated taxes is based on your prior tax liability.  If you had none the year before receiving the bonus, you would not be required to pay estimated taxes.  There are other aspects to this that a good accountant can explain.

Enough to pay out 1/3  OUCH  I paid on time but the tax person didn't charge me enough for Ohio and they tried to fine me but I got it taken care of as it was not my fault.  I agree with Joe get a GOOD accountant.  

Would it make sense and/or any difference to have the bonus spread out over several years?

I know its too late for those who have recieved their payment, but for the rest of us...

Jeff

Companies aren't doing that anymore.

Take your payment in stock, or stock options. when you sell it's capitol gains taxed at a lower rate. or ask for 50% roalitys untill the agureed upon payment is met .taxed at depleation allowance.

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