2014 Bonus Check Will Save Taxes and Avoid Penalties
Cut your bonus check by 12/31
Payroll Bonuses are a great way to catch up on income tax withholdings and confirm that you have paid enough taxes to avoid underpayment penalties.
How Much Is Enough, and When?
If you’ve PAID IN ENOUGH during the year, you should be owing less than $1,000 when you file taxes.
- Paid at least 90 percent of CURRENT YEAR
- Paid at least 100 percent of LAST YEAR
- Paid 110% of Last Year if “High Earner” (<$150K)
How to Pay Taxes Now?
Cut yourself a bonus check
How Much Should It Be?
Use Tax Projections Template to Calculate Correct Amounts AND To Create Tax Saving Strategies
GREAT TAX STRATEGY FOR S CORPs
HOW MUCH SHOULD BONUS CHECK BE?
The amount on payroll check is directly related to:
- how much salary you need to pay yourself to withhold appropriate income tax withholdings & avoid penalties
- how much have you taken in Shareholder Distributions
- how much CASH you have to pay payroll taxes
This can be a complex calculation but fortunately there is an awesome tool for us to use to crunch these numbers: