Taxpayer is employer who gave $100 to employees for Christmas gift/bonus. I asked if he added as supplemental wages to the employees W-2's and his answer was no. What is the best way to handle at this point? Should I list this expense under a payroll expense even though it was not handled properly?
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Unless a turkey, etc. it is my understanding that cash bonuses must be payroll.JG -
At this point; only at the
point of a gun am I correcting all those W-2s/reports. What about "employee benefits" (line 14) on C? It'll fly (I've flown it).Comment
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Christmas Bonus
Thanks Black Bart - I know that the bonus SHOULD have been added to payroll, but unfortunately, the taxpayer did not handle the correct way.Comment
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When one of my business clients does this, I just treat it as a net profit distribution. They have all been warned many times of how to give a bonus. To me it is just a personal gift.This post is for discussion purposes only and should be verified with other sources before actual use.
Many times I post additional info on the post, Click on "message board" for updated content.Comment
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We sometimes
add it to the payroll for the following year.Comment
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