Comment

Comment by Brian Sutphin on October 20, 2011 at 8:42am

Everyone's thoughts on this will be different i suppose. Randy, you bring up an interesting point of getting "caught" by the IRS. What actually happens in that case is worth asking your tax accountant as well. If that answer is minimal provided you still have the money to pay the IRS and havent spent it then one might be more inclined to move forward with a tax saving strategy.

Comment by Philip Brutz on October 20, 2011 at 8:10am

I think that the IRS is going to red flag us because our income is going rise so dramatically. I am just going to pay what I owe and not have to worry about an audit later.

Comment by Brian Sutphin on October 20, 2011 at 7:46am

Good Points guys. To hedge against any audit risk, i would simply reccomend that you hold back the money that the IRS could potentially come back for in a Conservatively manged portfolio or even a Savings account for that matter. That way you keep the money in your pocket instead of giving it to the IRS upfront.

Comment by Steven Gardner on October 20, 2011 at 7:20am

Its been my experience that you can claim anything you want ..but if you get an audit then you have to backup it all up and hope the examiner agrees with you. Some tax "experts" play it conservative .. some not.

Comment by Shower Bath on October 20, 2011 at 6:33am

I'd bet an accountant could almost do anything. I'd also bet they could get away with most things. I'd just hate to get caught doing the wrong thing, but I'm a fairly conservative fellow. Here's the link to this year's tax tables, just in case we get paid before Dec 31.

http://www.bargaineering.com/articles/federal-income-irs-tax-bracke...

Randy 

Comment by Brian Sutphin on October 20, 2011 at 6:21am

Thanks Randy. You are correct I would assume that there is always a level of risk when dealing withthe IRS. From what I have been told though by the gentleman i am working with is that they have succesfully done this before.

 

Comment by Shower Bath on October 20, 2011 at 6:20am

Here is a little helpful info. Let's all assume we get these huge bonus payments in Jan. 2012. Alot of people will think they get to keep & invest that money untill Apr 15, 2013, right? But it doesn't work that way. Uncle Sam will expect you to send in the first of your quarterly payments in March, 2012. When you come into a large sum like this you are required to make quarterly payments. If you fail to do so there are penalties. See the link from IRS. If someone wants the tax schedules, yell back and I'll post that link.

http://www.irs.gov/pub/irs-pdf/f1040es.pdf

Randy

Comment by Steven Gardner on October 20, 2011 at 6:06am

That's my understanding Randy

Comment by Brian Sutphin on October 20, 2011 at 6:00am

Thanks Nelson.

 

Steve as I am not the accountant I do not have the details or know where to find the code.

Comment by Shower Bath on October 20, 2011 at 5:58am

Bonus payments are required to be treated as ordinary earned income. If you report it as a capital gain, you do so at risk. There have been many dicussions of the tax consequences on the Harrison Co page and the main page.

Randy

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