I have been at the same company for 10 years. As a gift, my boss gave me $10,000. He was going to buy me a car, but did not know which to buy so he is giving cash instead. Would this be taxed differently then a bonus?

ANSWER

The BIDaWIZ Team's Answer:

A cash bonus is considered supplemental income subject to federal, state and payroll taxes. We understand that your employer would like to reward you a "gift." However, the IRS won't view it that way as the "gift" is directly tied to services rendered. For instance, had you not worked for your employer, you would not have received this gift. If it was a gift from a relative or friend for personal purposes, that is different. Your employer should gross up the bonus to include those taxes if the intent is to provide $10,000 cash to you.