Tag Archives: W-2

ANOTHER – Year End Tax Planning Tip – Bonus Via W-2 or K1?

This tax tip applies to folks who have enough control of their income to make a decision on how it flows. S Corp owners or the like may find this tip interesting, again we are not recommending, only REMINDING ! See your tax professional for your specific situation.

Bonus Via W-2 or K1

Depending on your situation, you may find it better to have left over income for the year be paid out via your corporation or other entity as non-W-2 income or net income to the corporation. See example below…

This MAY avoid some tax burden, but this technique should not be abused as the IRS may frown heavily on abuse.

Here is a good example: Owner/Employee takes a salary though out the year and funds are left over at the end of the year. Before just taking a salaried bonus, check with your tax professional on what options you may have.judge-learned-hand

Again, REMINDER, not recommendation… never get in the gray on taxes, however there are no gains to be had by paying more taxes than you would otherwise need or better said by Judge Learned Hand:

Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.

Hope you have enjoyed our Year End Tax tips, if you have missed any, just go here for a complete, concise list!

Have a great “Well tax arranged” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.

When to file your taxes?? Early birds, calm your feathers, especially if you receive these forms (But not on Saturday, Post Office suspends Weekend Service)

While procrastination can often times cause disruption of goals, especially topical so soon after new year’s resolutions, being too early to file your taxes can also create issues.Early Bird

We recommend you file your taxes no earlier than mid to late March and you may consider even later if you receive any of these forms:

  • K-1 (Frequently very late delivered)
  • 1099 Consolidated’s (Often times corrected)
  • Small Employer W-2’s (Corrections prevalent)

While it is not a huge deal to file a 1040X (Corrected tax return) it certainly takes away from the relief you may have experienced when you originally sent that return.

Not that haste makes waste, but in this instance, take a seat, relax, take a load off and get comfortable as your best bet for filing your tax return is still over a month away!

One last point, do not wait until the last-minute as that may lead to our prior saying of “haste makes waste” and will certainly bring stress into the equation.

Have a Great Day!


PS Don’t expect forms on Saturday as the post office just announced later this year to suspend saturday delivery. Nice tax savings !

PSS If you are cringing at this special week of tax issues, don’t worry you are almost finished….but hold on….this is important stuff, especially our coming Friday post!!

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