Personal Finance & Money Asked by MC tx on December 30, 2020
I work directly for a sales rep on all his accounts for the past 15 years. He is not my manager, I just work directly with him. If he meets his monthly quota, he would give me a monthly bonus in my paycheck. Now, his pay structure is changing and the bonus can’t go thru payroll. So,he wants to give me the bonus via gift card or cash. On a yearly basis my bonus could be from 10,000-16,000. Just depends what kind of year he is having. I read that the gift allowance is 15,000 for the IRS. Is this the best way to go?
A bonus isn't a gift, even if it's paid with a gift card. It's earned compensation, and it gets taxed as part of your salary.
If it was a gift, the gift tax would be the responsibility of the giver, not the recipient.
Answered by Pete Becker on December 30, 2020
If the "bonus" is dependent on your (or your branch/company's) performance then it is legally considered wages. If the money is not included on a paystub and the applicable taxes withheld, that is considered fraud by the IRS.
"The bonus can't go through payroll" means that this person is trying to not pay taxes on your wages. They are trying to scam both the IRS and you. Even if they pay the bonus with cash, they must provide a pay stub showing the full amount and that the correct taxes have been withheld.
If the money really is a gift (this is not one of those cases), then the taxes would be the responsibility of the gift giver, not the recipient.
Answered by Nosjack on December 30, 2020
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