Posted on 03/24/2009 11:14:14 AM PDT by Ramius
Check out posts #32 & #50. Taxes are paid for the year the bonus is paid (2009). Thus once returned, AIG files an ammended tax form and the bonus vanishes. When it comes time to pay 2009 taxes (in 2010), this will not be reported as income.
This isn't about that, really... it's about the neat little box that the Dems have knitted themselves into. :-)
Doesn’t mean you didn’t pay taxes on it.
I suppose AIG could try that, and the IRS may well let them get away with it for political reasons... but it’s a fraud. It does not fairly present what actually happened. It is stitching up an alternate history from the one that actually happened, IMHO.
This isn’t a “correction” to their income. It wasn’t a mistake. Saying now that it never happened may get everybody out of a fine mess, but like everything else this congress is doing... it’s a clusterf***.
. The AIG executives that have returned their bonuses—still have to pay the tax on them anyway.
two problems. Democrats don’t pay them anyway. This could be a problem for an honest politician.
Besides the US Treasury is a charitable institution isn’t it?
Then they’re stoopid.
That would be true up through the actual payment/receipt of the bonus in 2008. But it's no longer true when taking into account what transpired subsequently. If the entire scenario is taken into account, then the bonus money was rejected, AIG should be able to file an ammended declaration, and the issue goes away. I personally see no problem.
And beyond that, why were the bonuses rejected? Because the government after-the-fact voted illegally to tax them at 95%. So because the government decides to act illegally, these people should be penalized? Sorry, but thats immoral besides being illegal.
Great information, thank you for sharing.
Under “normal” circumstances when a bonus is “paid” it is subject to normal withholding for FICA, FIT, SIT etc just like normal ordinary income. So if you get a bonus of $10,000 given the amounts you will wind up with a check of lets say $6,000.00.
The other $4,000 goes in to the employer's tax withholding accounts and reported on a normal basis.
However, 1 day, 2 weeks whatever down the road you can say I don't want this money and you can return it to the employer. the employer can then void that payment and correct their accounts and it will be like it never happened. This happens all the time.
Until the end of the year when your employer prepares and here is the key “reports” the W2’s for the year the feds do not know about your bonus.
That said it can create an issue for quarterly under or over payment of taxes for the employer on the 941 form so most companies hesitate to do stuff like this. But until that copy of the W2 is physically sent or electronically reported to the IRS you could return a bonus with no tax implications at that time.
For the amount of money some of them are getting, you could hire Blackwater to defend your home or castle.
I agree with that.
Does it, really? People are routinely handing bonus money back to their employers? I don't see it happening very often at all.
The Payroll Manager tells me that she performs 15 - 20 corrections of this type per pay period.
Some of our clients get bonuses every pay period depending upon performance, sales, miles travelled, a whole host of reasons. More often then you would imagine these peopel are over paid in error. Once the corrected timesheets or bonsues are calculated the employee has to return the money.
She had one employee go out on STD, Short Term Disability, but their manager neglected to put them in to STD status from the regular pay category. This person was paid for 2 months in error before it was realized. The employee even spent the money. They had 1/2 with held from future paychecks and they had to write a check for the rest of the money.
As long as the puppets continue to here that this is a big deal they will continue to think that it is.
You cash the check the money is yours. Giving it back was stupid. I guess you could pay the tax then gift it back?
The IRS will be looking you up.
Continue to read, especially posts #32 & 50.
The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.
http://www.nytimes.com/2009/03/25/opinion/25desantis.html?pagewanted=1&_r=1
“On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.”
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