nink wrote:
refurb wrote:
Either way, it's nice to know that it's an option. A signing bonus after your internship would sure help in reducing the loans you take out in your 2nd year.
I received a signing bonus before. I remember that about half of the bonus amount went to the IRS.....
Yeah, i think the IRS treats it as a gift and taxes it at the highest rate (you'll get some back depending on your final income for the year).
Otherwise, the gov't treats it as actual income for the year. In other words, if you $4000 biweekly paycheck puts you in the 20% bracket, the $20K signing bonus will automatically be taxed in the highest bracket.
The cool thing is, if you can pull a signing bonus after your internship, you'll likely pay a LOT less tax on it, since your only income for the year is your internship (~$24K over 3 months) and the bonus!
RF