I have a client who is Married, filing jointly, with 3 dependents. She has made roughly $160,000 and is considering taking an $80,000 EOY bonus. What will the approximate tax liability be on such a bonus?
I would suggest that you obtain help from a professional as there may be more information needed to obtain an answer to your question
If you plug your numbers into ProSeries (which you certainly have, or you wouldn't be posting here, would you?), it will crank out your answer in a matter of seconds.
The ProSeries What - if worksheet or tax planner work well for this.
A-Man, I was on the road w/ only an iphone when I was asked this. Please don't be a jerk. These forums are for anyone who pays to be a Pro Advisor.Sorry Mitt didn't win, I know you wanted to retire on those sweet 1% wages you were expecting, Indy.
I think thou confuseth Quickbooks with ProSeries. Besides, I think AM is more into polkas than rock, so I'm guessing he isn't an Ozzie wanna be.
Dear llll jjjjjjj(if this is your real name), this forum is for professionals, not just anybody who pays to be a Pro Advisor.
Paying for a title gives you no credibility, and neither does your posting.
Cool. A name like that has got to be easily noticed in the phone book. Great marketing gimmick, but I'm not sure of the correct pronunciation. Do you mind if we just call you LJ?
The amount of potentially taxable money a person receives in a year NEVER determines the amount of tax the person will pay after all the calculations are completed.
If you are asking how much she should have withheld from the bonus, just make certain that the combined total tax withholding for TY2012 is equal to or greater than the total tax for TY2011. This will prevent any underpayment penalty no matter how much is owed when filing TY2012. She can pay any balance owed when the 2012 taxes are filed.
I'm wondering why anyone would "consider" NOT accepting a bonus. Makes as much sense as the guy that refuses to work a holiday at triple time because it puts him "in a higher tax bracket". With that logic, work one day a week and you won't have to worry about taxes.
Depends on where the bonus is coming from. If from a third party, it's a no-brainer. If it is coming from your own schedule C, well I guess that is a different kind of no-brainer. Maybe JP can shed some more light on the issue. Or maybe JP tripped on the red carpet we rolled out and is spending some time recuperating in the hospital.
Thanks to all who were willing to help! Rasberries to all old age haters (dumb hatters)!
JP:
Just for your information, you posted your original question on the Pro Series INCOME tax forum. Therefore, the assumption was (especially when you mention client) that you were trying to tax plan for a bonus. However, when you mention Pro Advisor, it looks like you needed to post in the Quickbooks forum which is a different forum altogether. Just added to the confusion. Hopefully, we can rise above some stupid insults. It is not worth it.
EDIT: Irmn beat me to it above.
Personally, I'm glad JP is handing out rasberries to everyone - this time of year it is hard to find good fresh fruit. But I do have to admit, I am bit upset tha JP thinks my Bullwinkle hat is dumb.
C'mon over. I have 2 gallon bags of raspberrries from our vines in the freezer.
I could have gone all day without that visual. Red raspberries are my favorite fruit, and they absolutely will not grow in the Texas heat and drought. I can't even count the times I've planted them watered and shaded them, only to watch them go heels-up in Aug and Sep.
Our soil is poor and we can't grow corn no matter what. The raspberries are all in raised beds with topsoil. And they are good!
My sister-in-law makes a fantastic raspberry jam that doesn't get cook, stays bright red and goes in the freezer. Let me know if you want the recipe.
Raspberries grow like weeds here. Most years, corn grows like dead weeds here.
