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How to minimize taxes with 6 figure bonus

#notsohumblebrag
 
My first suggestion is go more subtle on the brag.

My second suggestion? Lose weight.
 
Think about what you're going to do with the money before you get it. You just bought the government a new BMW.
 
What's your work situation? Is this a large company or a closely held business?
 
I don't remember starting this thread
 
1. Can you defer some into a 401k or are you already maxed out?
2. Put $5,000 in an IRA (but probably your AGI will be too high for the deduction)

there's not too many ways to defer taxes on straight cash bonus compensation.
 
socaldeac said:
S Corp. privately held business.
Click to expand...

Is everybody in your company getting bonuses and looking to defer? We have a similar situation and we set up a SEP-IRA and max it out. Can put in up to 25% of your yearly income and defer income taxes and not pay employment taxes on the amount.

You can defer some state taxes with a 529 plan if you have any kids.

But every employee has to participate in the SEP IRA and the employer contribution has to be the same % of your yearly income. It's a great deal for people under the SS limit because you save employee and employer SS and Med. That portion would fund part of their contribution and you can treat it like a quasi employer match. (Take 17% less salary and we will fund 25% of your salary in a SEP-IRA and you don't pay SS on that portion either).
 
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Good for you, man. I think that's really great that you can work hard and earn that kind of blessing, you know? A lot of folks would choose to pay it forward, maybe put it towards some sustainable living initiatives, things of that nature, but that's totally up to you and your own personal life plan. I wish you and yours the very best.
 
Only 6 figures? Do you take your meals in a soup kitchen? Dress in rags and old magazines found in library dumpsters? Wake us up when you add a couple zeroes to that paycheck, kemosabe.
 
How do you mean minimize taxes? Like just general strategies? You're going to take a big hit in the withholding.
 
This thread is the equivalent of me posting "how do I minimize sagging in my tits as I age?" and then posting a bunch of pics.

Enjoy the bonus though.
:)
 
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