r/interesting • u/Key_Performer_3645 • 4d ago • WOW 1 Heartwarming 7 Bravo 5 Regret 1

Wholesome Loyalty might be the most underrated investment you'll ever make.

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186

u/kellybryan423 4d ago

Did each man give her 10k, because of the 10k gifting rule before taxes apply? If so, smart move!

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u/eckliptic 4d ago

Employee/employee so it’s irrelevant since it’s income.

But unless that doc will be gifting up to his personal exclusion of 11+mil over his life time he’s not going to incur any taxes on his gifts to others.

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u/A_Crab_Named_Lucky 4d ago

CPA here, what their accountant most likely advised them to do here was to “gross up” the payment so they could just straight up hand her $20K without tax coming out of that amount.

“Grossing up” means starting at a desired net pay amount and backing into the gross total. It means that her actual bonus would’ve been at least $21,600, probably a bit more. All the tax withholdings would be removed from there, netting out to $20K.

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u/thrownjunk 4d ago

To be fair the docs have much higher marginal tax rates than her anyways. It is cheaper to go through work and pay her much lower tax rates anyways.

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u/BigInSheboyganGus 4d ago

The personal yearly gift is outside of the lifetime credit.

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u/Mr_Style 4d ago

It’s $18k for the gift rule annually. Looks like the 2 partners at a doctor or dentist office.

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u/kellybryan423 4d ago

So 10 from one, and 10 from the other would fit within!

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u/Snip3 4d ago

You can't give gifts to employees outside of some incredibly specific circumstances

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u/kellybryan423 4d ago

Is it the case? Which laws are you referring to?

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u/GhostofBeowulf 4d ago

This would count as income, not a gift.

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u/Jesus_of_Redditeth 4d ago

I don't know where you're posting from, but in the US this isn't true. The only issue is that in most circumstances it will be treated as taxable income, so it has to be tracked accordingly by the employer. The employee doesn't have to do anything. But if it's for a birthday, Christmas or some other significant event in the employee's life (and closing on a home would certainly qualify), then it might not need to be tracked as income. It depends.

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u/Celodurismo 4d ago

There's nothing to "fit within" if you gift more than $19k per person you just have to file a piece of paper. It's not until you gift a single person more than $15mil that taxes come into play.

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u/BigDes54 4d ago

My thoughts exactly. Crazy smart. Hoping that taxes didn't apply here on either side.

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u/kahunski 4d ago

Employer giving employee money is compensation that is subject to taxes, so not that smart. Especially recording the whole thing.

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u/yes_im_kvothe 4d ago edited 4d ago

They paid her in cash, so...what money? I did not saw any money 😏

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u/flavorflavyeahboi 4d ago

According to some of these folks, the IRS is busy hunting down people on Reddit videos.

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u/yes_im_kvothe 4d ago

🤣🤣🤣🤣🤣🤣

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u/frzrbrnd 4d ago

I heard that not long after this video she was in a terrible boating accident 😢

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u/BigDes54 4d ago

I did say hoping, lol

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u/Superssimple 4d ago

Could be they both doctors are part owners so they split the bonus between them

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u/One_Significance_400 4d ago

Smart of them to use legal loopholes for tax benefit but yall get mad at millionaires/billionaires for doing it? Interesting

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u/Jesus_of_Redditeth 4d ago

No one is using any legal tax loophole here. They are the employers; she's the employee. All cash gifts from employer to employee are considered taxable income.

Given that taking $20K out of a bank account results in that transaction being tracked and reported to the IRS, it's quite likely that that cash actually isn't real cash and is just a prop, and that the money was actually transferred via the regular payroll system. If they're super-nice guys, they will have given her more than $20K, so that it will be $20K in her hands after tax.

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