As December 31 creeps closer, some employees are wondering what Santa will leave in their payroll stockings. Visions of huge bonuses – like the $10 million in bonuses to be paid to the 198 employees of Baltimore-based St. John Properties – may be dancing in their heads. But statistically, most bonuses and gifts are modest,…
Taxes From A to Z: B is for Bonus.
Remember those pesky IRS bonuses? Last month, despite a directive from the Obama administration for agencies to cancel discretionary bonuses because of automatic spending cuts, the Internal Revenue Service appeared to be moving ahead with plans to distribute $70 million in employee bonuses. Now, that’s changing. Danny Werfel, who is now serving as the Acting…
In two weeks, the Internal Revenue Service will close its doors for the third time this summer. IRS employees will not report to work on July 5, 2013, as the result of furloughs allegedly due to budgetary woes. IRS employees, already operating under pay freezes – some for the last three years – will not…
Y is for Year-End Bonus. Did you get a bonus in 2012? If so, kudos. Annual bonuses are becoming a rarity these days. They are, however, still issued, either as recognition for making to the end of the year (!) or for outstanding service. No matter the reason, bonuses are considered taxable income to the…
The House moved quickly to vote yes on a bill to tax big employee bonuses given by companies who have taken substantial amounts of TARP money. The bill would impose a 90% tax on bonuses to highly compensated employees of companies that received more than $5 billion (with a b) in TARP money from the…
Taxpayer asks: My husband and I both work and we have two young children. For the last two years, we have paid a babysitter to watch our children while we are at work. Last year, for Christmas, we gave our babysitter a pretty good sized cash gift as a thank you. When we were doing…
Taxpayer asks: Each year, instead of a Christmas bonus, my employer gives us some pretty nice gifts for the holidays, stuff like iPods and gift cards. Since it’s a gift, I don’t have to pay taxes on it, right? Taxgirl says: Clearly, a holiday bonus of cash is taxable as income. It’s not really a…