Help

[happymommy]

Hi
I need help. Dh was offered profit sharing each month at work.
He will receive his first payment/check this week.
That's all great, but the bookkeeper questioned what to put it under,
dh said bonus and she said well your going to pay more taxes.

No one seems to know. Is it legal to get a separate check each month,
of course having taxes taken out for profit sharing?
We live in Massachusetts.

And this would be monthly not yearly, does that matter, or make it more complicated?

I'm not concerned about the amount of taxes he has to pay, I just want this to be done correctly. I feel like we are doing something wrong, and it makes me nervous.

Also his boss doesn't know or should i say care what to declare this under.
Thank you.

[Ramona]

I went to the Massachusetts Depart of Revenue website and found their contact information:

Massachusetts Department of Revenue

Here's how to contact them for specific questions:

If you have specific questions about your tax account, please call 617-887-MDOR or toll-free in Massachusetts 800-392-6089 or write to us at PO Box 7010, Boston, MA 02204. DOR's customer service call center hours for tax help are 10 am - 1 pm and 1:30 pm - 4 pm, Monday through Friday.

[Greebo]

Hi
I need help. Dh was offered profit sharing each month at work.
He will receive his first payment/check this week.
That's all great, but the bookkeeper questioned what to put it under,
dh said bonus and she said well your going to pay more taxes.

No one seems to know. Is it legal to get a separate check each month,
of course having taxes taken out for profit sharing?
We live in Massachusetts.

And this would be monthly not yearly, does that matter, or make it more complicated?

I'm not concerned about the amount of taxes he has to pay, I just want this to be done correctly. I feel like we are doing something wrong, and it makes me nervous.

Also his boss doesn't know or should i say care what to declare this under.
Thank you.

You aren't doing anything wrong by making more money or earning profit sharing.

As I understand it, profit sharing income is supplemental income - it's treated as part of your total income at the end of the year.

You will have more taxes withheld from profit sharing income, but that isn't the same as actually owing the taxes. Withholding is simply what the Gov't forces us to set aside for them during the year, and bonus money like this is withheld at the highest rate. It will change your total income, of course, which can push you into a higher bracket, but if your regular withholding is already getting you close to $0 then this will just mean you get a bigger refund cause they'll be holding too much of your money.

I'm a *little* concerned that the bookkeeper doesn't know how to file it though... sounds like the bookkeeper isn't actually a tax pro. Is that *your* book keeper or the employers?

[happymommy]

I finally get it!

After talking with dh, the bookkeeper was just cringing thinking about how much is going to be withheld.

I'm happy with the net. I'd rather pay now than owe in April.

Thanks Greebo!