Replies to This Discussion

Permalink Reply by randy on August 5, 2008 at 12:27

hello. i've also been thinking about the taxes and would like to know if there is a way to park the money in an account and draw interest of the amount before taxes are paid 1-2 years to offset or help pay the taxes ,and or start paying taxes as it is taken out??? im no expert but i think you can put it in a trust fund and not pay taxes anybody got ananswer or opinion

Permalink Reply by BLZBub on August 5, 2008 at 16:04

Bonus money is regular income in the year received. Only way you can defray the tax is to set up some sort of charitable trust if bonus amount is worth the effort.

Permalink Reply by LYNN on August 6, 2008 at 12:58

I am fairly sure that at the end of this year you will receive a 1099 from the o/g company with the amount that they paid you in bonus money. This will be added to your regular income if you work and you will have to pay taxes on the total amount which will probably be around the 41% that you were told. You can do a charity but you can only take off so much for this. It is another article wrote somewhere on this site regarding pay taxes. What lots of people are doing is taking the 41% and investing it somewhere until the end of the year so they will have the money to pay the taxes. Believe me that Uncle Sam will know how much you received.

Permalink Reply by Steve Bacle N3 on August 7, 2008 at 0:53

Cassie,

If your taxable income is over $357,700 your Federal tax bracket is 35%. Louisiana tax is 6% so there is your 41%. You must make an estimated payment on your 2008 Federal tax by 15 Sep 2008. You do not have to pay the full 41% but must pay a certain amount by that date to avoid tax penality. I have heard that if you pay 100% of your 2007 tax on 15 Sept 2008 you can avoid the penality. You need to check with H&R Block or tax accountant on that. But bottom line when you file on 15 April 2009 you will pay 35% to the IRS and 6% to Louiana.

Now what I plan on doing is to pay the minimum on 15 Sep and invest the remainder. I will draw interest until 15 Apr when I pay my taxes. I will invest in tax free bonds next year.

Don't forget that 15 Jan 2009 is another date you must pay estimated tax on your 2009 income. Get use to it... you are rich and will have to pay estimated tax. Enjoy;-)

For you Democrats, Obama thinks 35% is not enough and wants to raise it to 50%. Mull on that when you go to vote.

Have a great day!
Steve

Permalink Reply by mooncookie on October 6, 2008 at 8:47

Isn't there a difference between capital gains and ordinary (earned) income?

Uncle Sam is not a great banker in my experience.

Permalink Reply by Cassie on August 7, 2008 at 4:14

ok people i just broke down and called the IRS they told me that 41% is just not true. i was told that i will get a 1099 like someone else mentioned in this discussion. but that then it would be added to line 17 on a 1040 form and would be added into my gross total income. land bonuses and royalties go on the same line as trusts so keep that in mind. it all depends on your income and tax bracket that you are already in. and to the person that said your rich enjoy, i got 4000 even i don't quite count myself as rich. but i also have an income of 22 to 24,ooo a year nothing like the 375,000 that steve mentioned so my taxes will be nowhere near 41%. and that came straight from the IRS

Permalink Reply by Steve Bacle N3 on August 7, 2008 at 23:38

Cassie,

Sorry to scare you. Your tax will be 10%. You will get a 1099 in January.

Steve

Permalink Reply by BLZBub on August 7, 2008 at 7:03

Cassie,

All depends on what royalties you get. If check >$375,000, you will be paying 40% taxes. And yes, Obama will want more than that.

Permalink Reply by Bet Crain on August 7, 2008 at 8:06

Some of you might want to check to see if this gas money might be rolled into another long term investment. I don't know that much about the oil money but it seems to me that it has been sitting there long term and should be considered as a long term investment. You may also want to talk to your tax person about spreading it back over the past 5 years.

Permalink Reply by Bet Crain on August 7, 2008 at 8:46

For some information on tax on natural gas income go to Google,
Key in Natural Gas Depletion, the Wikepedia is the one I read and look for publication 535. This gives you information on the depletion. I have been using the 22% basis on the income yearly for a long time. However I am not sure about the bonus amount received up front but from I read it looks as if you may be able to take the depletion from that also. You really need to research this well. It is complicated and everyone needs to look into this carefully.

Permalink Reply by Steve Bacle N3 on August 7, 2008 at 23:45

Sorry to say depletion allowance is not availabe for the lease bonus. It is taxed as earned income in the year that you recieve it. I wish we could use depletion. Now when you get gas royalities, you will be able to use depletion... unless the Democrats that away from us.

One thing I have heard but not confirmed, the Feds and the state will kill you twice on the death tax. Your estate taxes go way up because of the extimated income from the royalities. Talk to a laywer about setting up a trust to avoid estate taxes.

Permalink Reply by MJC on September 22, 2008 at 4:37

Two years ago my tax preparer used a form titled "rentals and royalties". The tax was a flat 25% on a $12,000 lease bonus.

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