Signing Bonus/Tax bracket Question

[Jbird]

My wife just finished grad. school...finally!! She recieved a $27,000 signing bonus, while still in school (2006). She does'nt start work until next week so this was her only reported income on her 2006 W-2. The check that we recieved was $25,000. They originally deducted $1678 for SS and $392 for Medicare. Thats it!?

What should I be prepared to pay for this tax season?

 

[LOL!]

Since your income is $593,244.12, that means your wife's marginal income tax bracket is 35%. Also since you failed to withhold any taxes from your paychecks, that means that you should expect to pay $235,341.11 in Federal taxes plus the penalty. You all will also owe another $74,188.09 in state income taxes.

Anyways, that's what you should be prepared to pay for this tax season.

 

[lets-retire]

Without a lot more information your question is impossible to answer. What did you make? How much did you have withheld? Do you itemize? How much are your itemized deductions? How many people are in your household? You would have to essentially layout a lot more information then most people would be comfortable providing.

 

[REWahoo]

As stated above, there is no way to know what you might owe. Be aware that since no income taxes were withheld from the bonus payment, you could owe both taxes and a penalty for failing to make an estimated payment. You might want to take a look at IRS publication 505, particularly the section pertaining to "Who must pay estimated taxes".

 

[LOL!]

Without a lot more information your question is impossible to answer.

Exactly. Garbage in; garbage out.

 

[Martha]

You guys are so tough!

Here is a simple and sweet calculator that will at least give you a rough estimate, assuming you are not going to itemize but instead take the standard deduction: http://www.dinkytown.net/java/Tax1040.html

Congratulations to your wife, that is a great bonus.

 

[REWahoo]

You guys are so tough!

Uh...I read the question as what taxes will they owe on the bonus payment and responded to that. Didn't intend to be tough, what with me being a kind, gentle soul and all...

 

[Martha]

You're right Wahoo, I take it back.

 

[LOL!]

Wife should have been over 50 and already eligible for the 401(k), so she should have put $20,000 of the bonus into the retirement plan in 2006. That would've helped on taxes.

 

[jazz4cash]

It's not too late to fund an IRA for 2006 if she's eligible........it's the only way I know to reduce tax liability on 2006 income.

 

[sgeeeee]

Uh...I read the question as what taxes will they owe on the bonus payment and responded to that. Didn't intend to be tough, what with me being a kind, gentle soul and all...

Martha:

You're right Wahoo, I take it back.

Isn't nice when everyone gets along and is polite and considerate?

 

[unclemick]

heh heh heh heh heh heh heh heh heh heh heh

I'm keeping the Curmudgeon Certificate!