I am curious about the taxation of signing bonuses, because I have heard variable things on the internet. Should a signing bonus be 1099 or W2 income? The current group I am signing with said I can take the signing bonus now but it would be 1099 income. If I wait until I start working in August then it will be W2 income.
The benefit of having it be 1099 income is that I could put money into a Solo 401K at the employer rate (because I am already maxing out my 401K space). I have other 1099 income (moonlighting) so I can use that to deduct expenses such as boards. My concern with the 1099 option is that the IRS will later tell me that it was inappropriately characterized and some how my Solo 401K contributions will be void.
Anyone else have experience with this?
The benefit of having it be 1099 income is that I could put money into a Solo 401K at the employer rate (because I am already maxing out my 401K space). I have other 1099 income (moonlighting) so I can use that to deduct expenses such as boards. My concern with the 1099 option is that the IRS will later tell me that it was inappropriately characterized and some how my Solo 401K contributions will be void.
Anyone else have experience with this?
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