|
Posted by Laura on March 13, 2008, 8:59 pm
Please log in for more thread options
> Laura wrote:
>>> Allan Martin wrote:
>>>>
>>>>> If I issue a bonus paycheck to employees for the payroll period ending
>>>>> December 31, 2007 but date the check with the current date,...
>>>>
>>>> The date the check is issued determines which tax year the wages get
>>>> reported.
>>>
>>> For the business -- for the employee it will be when they receive it as
>>> they will almost certainly(:) ) be on a cash basis on their tax year.
>>
>> Those are the "official" guidelines from the IRS using the concept of
>> "constructive receipt".
>>
>> But in reality, the w-2 received (and reported to the IRS/SSA) will be
>> based on the paycheck dates not the year the employee received it. With
>> many companies using Direct deposit the last paycheck of the year when
>> dated in that year will be included on the 2007 w-2. It is not worth the
>> hassle with the IRS to have the company report one number to the IRS and
>> you decide to use a number that is not reflected on the w-2 received.
>
> If I were working for you and you waited until nearly first of April to
> make a so-called "year-end" bonus, unless it were really to my advantage
> to take the tax hit in '07 I'd argue to point w/ the IRS if they
> questioned it. I'd note on the return the reason for the discrepancy and
> highly doubt it would ever be questioned.
>
> If, rather than "current date" OP means at (or very near) the time the
> standard year-end payroll were paid, that's something else again. I read
> the question as only having any validity asking now as a delayed payment,
> but I suppose he could be looking at tax implications of a
> previously-executed action--that didn't occur to me until now, though.
Many large companies pay bonuses for prior year performance in the
March/April timeframe. They purposely keep them out of the normal heavy
payroll timeframes like year end W-2s or corporate tax filings. It is wages
for 2008. I don't think that you would win this argument with the IRS since
you received the money in 2008. The only time you *might* win the argument
would be a December 2007 paycheck that was not received until 2008.
| 
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap