Today TaxMama hears from Scott the Doc, “I’ve got a sticky question for you – nobody seems to know this one, not even my financial planner.
buy lexapro online https://healingtohappy.com/wp-content/languages/new/lexapro.html no prescription
I am a resident physician, making a nominal salary. I just signed a contract with a practice for next year – it contains a sign on bonus and monthly stipend for educational expenses. The whole thing is a loan – paid back 1/36th per month each month I work at the practice. (obviously wiped out in 3 years) What in the world do I pay taxes on? Is it considered a loan? Regular income? Obviously this could create new estimated tax problems for me if considered regular income. Any advice you have would be greatly appreciated.
https://www.pharmalucence.com/wp-content/languages/new/cymbalta.html
”
Dear Scott,
The education part is not taxable. That’s supposed to go for educational expenses, so be sure to use that money for that purpose.
buy ventolin online https://healingtohappy.com/wp-content/languages/new/ventolin.html no prescription
If it’s a sign-on bonus, it ought to be something you get to keep.
https://www.pharmalucence.com/wp-content/languages/new/prelone.html
If you must pay the whole thing back over 3 years…then, it’s a loan. The only way to ensure that it is a loan is that you have a written a contract that spells that out.
Also, to ensure that you are not taxed on the money as income, be sure to speak to the payroll department. Ask them how they plan to report this payment to you.
If they intend to report all the money income on your W-2 this year, head off that process RIGHT NOW. Have someone in charge alert them that this is not income to you – except for the 2 months worth.
buy cialis online https://healingtohappy.com/wp-content/languages/new/cialis.html no prescription
(After all, regardless of how you think you’re going to handle it, if they treat it was wages…you’re stuck reporting it – or you’ll have to go through a complicated procedure with IRS to prove your case when they write to you, looking for that income on your tax return.)
Work it out with your payroll department so that they add 1/36th to your payroll income each month until you’ve been there for three years. If they also take out withholding, you won’t owe any money each April. But, since it will be phantom money – in other words, money you won’t really be getting each month, the withholding will cut into your paycheck.
https://www.pharmalucence.com/wp-content/languages/new/zithromax.html
So, be sure to set aside some of that bonus to live on over the next three years.
Of course, your alternative is to leave enough money in the bank so you can make estimated tax payments each quarter – but who ever remembers those odd payments? Payroll is so much easier.
And, remember, you’ll find answers about lots of information about earnings and lots of tax issues, free. Where? Where else? At TaxMama.com
- Ask TaxMama :: Where taxes are fun and answers are free
File Download (2:42 min / 1.9 MB)
