Our company offers participation in a profit-sharing program, to be paid out after the books are closed at the end of the fiscal year. A participant in last years bonus pool is no longer with the company so I don't know if I should just send her a check or run it through payroll so that she/we pay the appropriate payroll taxes. Help!!!

ScottGem

If the bonus check is taxable income run it thru payroll. You will need to withhold taxes and provide a W2.

Fr_Chuck

You are being very nice, the company I used to work for, did not allow any employees who had left the company to remain in the profit sharing bonus program.

I would assume first that you would have to pro-rate it for the amount of time they worked there that year.

But since all money, even bonus money is taxable, all you do by not taking taxes out of this money is cause the employee issues in reporting it, and making you write out 1099 forms for the bonus money not ran though the payroll dept.

So basicly all bonus should always be ran though payroll,