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Marvin,EA
Marvin,EA, Enrolled Agent
Category: Tax
Satisfied Customers: 1672
Experience:  Enrolled to Represent Taxpayers Before The IRS
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i recently joined a new firm and was given a signing ...

Customer Question

i recently joined a new firm and was given a signing bonus in the form of a forgivable loan or promissory note, whatever its called. How much do i pay in taxes for this.
Submitted: 8 years ago.
Category: Tax
Expert:  Marvin,EA replied 8 years ago.
Hello and thank you for using Just Answer. The amount you received from your new firm is taxable income to you. The amount will be reported on you tax return and tax you tax rate. What was the amount of the bonus and other taxable income you will earn in 2008?
Customer: replied 8 years ago.
Reply to Marvin,EA's Post: it is a 50,000 bonus and ive got a guarantee for 300,000 this year. i just didn't know if this gets taxed at ~50% like my regular year-end bonus or at my normal tax rate.
Expert:  Marvin,EA replied 8 years ago.
You employer should have withheld from your bonus 25% for federal income tax but your tax can be less if you have deductions to offset the withholding from the bonus. The top tax rate for 2008 is 35%. Are you sure 50% was withheld from your regular year-end bonus?
Customer: replied 8 years ago.
Reply to Marvin,EA's Post: I have always been taxed in the 40% range for my year-end bonus.

My new employer did not withhold anything from my signing bonus - just gave me the full check.
Expert:  Marvin,EA replied 8 years ago.
If you new employer did not withhold federal income tax from your bonus the amount the amount you received might not be taxable income. You wrote that the bonus was a "forgivable loan" do you know if you have to pay the loan back to your employer?