Posted on 03/24/2009 11:14:14 AM PDT by Ramius
No good deed goes unpunished and all that.
Are you kidding? It's taxed as income. You may not consider it such in some particular way, but the IRS does...
A bouns isn’t salary, but it is income.
What about this...
They get taxed on the income because they can’t gift it away.
AIG gets taxed again on it as business income!
Don't forget, many of the people that received a bonus were located in London (as London is where AIG-FP is HQ'd). So, unless they are American citizens living abroad, this 90% tax that Congress passed is nothing more than a joke.
Just one more reason to abolish the income tax and the IRS!
So, you got bonuses that had taxes taken out? Then they must have changed the law because every bonus I ever got was for the whole amount. It’s the same as a residual.
What if the check was cashed?
Yes, that’s what I should have said.
First they came for the AIG execs. And I did not speak up because I was not an AIG exec.... repeat.
Oh that’s right, I am speaking up.. screaming in fact. To no avail apparently.
Didn’t a famous boxer (1930s?) have to pay taxes on winnings he immediately turned over to a charity? And that bill ruined him and his career.
Lets roll.
If the recipients give back the bonus, the employer (AIG) will need to amend the filings on the 941 payroll tax qrtly federal return. This move negates the bonus and the employee has no liability. not an unusual event to adjust payrolls in a large company.
Then they "grossed it up" behind the scenes, and only told you the net amount. Your $5,000 bonus, for example, would have cost your company something like $7,438.23 - but the only number they disclosed to you was the $5,000 net.
My former employer always gave us gross bonuses, so an employee would be told they got a $7,500 bonus and would receive a net check of something like $5,013.67
Holy smokes, over the years I overpaid about $100,000! Income is income.
Does that matter? If they're returned to the giver and no realization of profit has been realized, can they really be counted as income?
Wouldn't it depend on the language of the contract? If the bonus was offered ahead of whatever triggered the "earning" of it, isn't it the same as a deposit on something? That is, the recipient of the funds is holding them, but technically they are still owned by the payer, and can be returned on demand...right?
Too bad they don't all band together to fight this bill of attainder or fight it on the basis of the unconstitutionality of this targeted punishment by taxation.
At least they would have "standing" in the lower federal courts on up to the SCOTUS because they are the victims.
Although, if the Obama birth certificate legal battle is any indication, not too many individual U.S. citizens or organizations have the luxury of enjoying "standing" in the eyes of federal liberal judges.
Leni
Even if it the bonus was the full amount, with no taxes taken out of the check, it still counts as income when you do your return.
When hubby and I get our W-2s each year the total income is our salary + bonus.
If you weren’t ever paying taxes on those bonus checks someone along the way screwed up.
And it's considered income at the end of the year also.......
If you cashed the check, absolutely.
I'm no accountant. I'm just looking at this from a practical standpoint. Even though the check may be cashed and deposited, if it's ultimately returned to the giver while incurring no enrichment to the recipient, can that legally be considered taxable income?
Take someone who orders a dress from an online website (here we have the added implication of the recipient initiating the transaction). On receipt the recipient tries on the dress to find they don't like it. The dress is returned. Can that seller still charge the recipient?
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