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Tax Question: Can you give back your salary...
- Thread starter MotionMan
- Start date
MotionMan
Lifer
You win the lottery in 2009.
You decide that your employer was really nice to you, so you give back the last two years in salary.
So, the question is:
Not that you need it, but, can you get some tax benefit because, now, you retroactively had no income in 2007 and 2008.
MotionMan
You decide that your employer was really nice to you, so you give back the last two years in salary.
So, the question is:
Not that you need it, but, can you get some tax benefit because, now, you retroactively had no income in 2007 and 2008.
MotionMan
DaveSimmons
Elite Member
If it's a small company, you could offer to invest a couple of years' salary for stock.
If it's a big company it might make more sense to make $12K gifts (= at the tax-free limit) to each of the people that made working there worthwhile.
Either way, no deduction for you. But what do you care if you're rich?
If it's a big company it might make more sense to make $12K gifts (= at the tax-free limit) to each of the people that made working there worthwhile.
Either way, no deduction for you. But what do you care if you're rich?
dullard
Elite Member
Automobile CEOs and now possibly large bank CEOs.
Of course, it is just "free" for a short time, then they get massive bonuses in a few years to cover what they would have earned + bonuses they would have earned + bonuses to cover tax consequences + bonuses for staying + bonuses for their good work running the company into the ground for years. This is because no one else supposedly has the skills to make bad decisions.
sactoking
Diamond Member
No, you can't get a tax break for "giving back" your salary. Once you accept it, it's yours. They'd be two separate transactions. You also cannot avoid taxes by refusing to cash your paycheck. The IRS operates under the assumption that money you get is income 'when it becomes available to you', whether or not you actually make use of it. In this case, the minute your paychecks were signed, they became income and only those actions deemed 'adjustments to gross income' or 'itemized deductions' are going to change that, and the adjustment can only be claimed in the year the action took place (e.g., you earn $50,000 in 2006. In 2007, you give $10,000 to charity. The deduction can only be taken in 2007, not 2006).
MillionaireNextDoor
Platinum Member
let me guess, you own 100% of the company you work for and with your newfound wealth want to channel it back into equity to refund the double taxation?
its called 401k.
http://en.wikipedia.org/wiki/401(k)
Depending on your employers plan, he can put the offset into your 401k and your income tax wont go up.
Of course you pay tax when you collect it tho.
America Always gets there tax, either up front or when you collect, or when you die (estate / probate Tax).
Talk to a Financial Planner for more info.
http://en.wikipedia.org/wiki/401(k)
Depending on your employers plan, he can put the offset into your 401k and your income tax wont go up.
Of course you pay tax when you collect it tho.
America Always gets there tax, either up front or when you collect, or when you die (estate / probate Tax).
Talk to a Financial Planner for more info.
dullard
Elite Member
Yes, with this form. Politicians in the news seem to be doing it all the time right now.
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