Have Tax Questions? Ask a Tax Expert for Answers ASAP
SO MUCH of that answer has to do with your specific situation .... The bonus. is really just additional income for the year... So the possible answers are the same answers that MIGHT already be there for reducing taxes, generally (1) increase contributions to your qualified retirement plan for the rest of the year ...
(2) Be sureyou've maximized form 2106 (unreimbursed employee expenses)
(3) Look for every possible deduction (if you itemize) Here's one of the most exaustive lists I've seen:
Be sure you're not missing any dependency exemptions (children and others that may be claimed as dependents)
File jointly if possible
Probably the biggest difference you can make (since we still have4 mon ths left in the year is to increase 401(k) contributions for the retst of the year ... the additional income will raise the amount you can contributew AND this monsy stays your (as opposed to all of the other deeductions you can take where you have to spend a dollar to save 25 cwnts (at the 15% tax bracket)
(sorry for they typos) the money is still your money, (in that retirement plan), again, as opposed to actually SPENDING the money on something to get a deduction
If you've ever thought about starting a business ... now ight be the time, (as it's common to have more expenses than income in the first year) thereby generating a tax loss
(If you do that for 3 years or so the IRS may come back and call it a hobby, but if you really have those aspirations to start that business, now may be the time (both because of the additional money in pocket and the potential first year tax losses)
Is it better to stretch out the payments to lessen the tax rate?
YEs, if you can control that... ABSOLUTELY
Do you file jintly or single (I can get tha rate tables for you so you can see when you are about to go into that next bracket for the year)
VERY good thought
Yep, but remember that's a progressive rate ... but yes 39.6 on that last dollar, if that's where you are ... AND remember that's TAXABLE income (after itemized deductions or standard and exemptions