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Permalink Reply by J W on August 22, 2008 at 11:08

IT IS A INCOME SO YOU PUT THAT MONEY ON TOP OF YOUR 1040. IF YOU WORK. THEN LOOK IN THE TAX BOOK AND IT TELLS YOU. HOPE YOU DONT MAKE OVER 100K . IT GOOD BE 44%

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Permalink Reply by A. Waites on August 23, 2008 at 5:29

Thank you.

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Permalink Reply by Kathy Morgan on August 22, 2008 at 13:46

The highest federal tax bracket is 35% and LA state is 6%, so a max of 41%. The lease/bonus/royalty income is added to your total income and taxed at your normal rate for taxable income. This is after your exemptions and deductions. For a single filer brackets for 2008 taxable income are as follows (double for married joint filers):

Federal
$0 - $8025 = 10%
$8026 - $32550 = 15%
$32551 - $78850 = 25%
$78851 - $164550 = 28%
$164551 - $357700 = 33%
$357701 and up = 35%

For example: If your taxable income (w/shale income) is $100,000 your tax would be $21,978. (($8025 @ 10%) + ($24525 @ 15%) + ($46300 @ 25%) + (21150 @ 28%) = $21978)

LA State
First $12500 @ 2%
Next $12500 @ 4%
All over $25000 @ 6%

Hope that helps.

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Permalink Reply by A. Waites on August 23, 2008 at 5:28

Thank you that does help a lot

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Permalink Reply by Donna Thornton on August 23, 2008 at 14:16

As a side note, you will file it on Sch. E of the 1040. If you paid money to an attorney or anyone else that helped you obtain this income, you are able to take a deduction on the Sch. E for this. The bottom line flows through to page 1 of your 1040 (line 17 if I remember correctly).

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Permalink Reply by VSC DeSoto South on September 11, 2008 at 2:43

As an out of state payer, does LA require require you pay estimated payments like the irs? Are you allowed to wait until april 15th?

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Permalink Reply by Kathy Morgan on September 11, 2008 at 12:46

The state of LA payment date is actually 15 May. The state makes no distinctions between residents and non-residents as to when to pay. The rules are basically the same as the federal. See my post below with the specifics on if you need to make estimated payments and my post above to guesstimate how much they should be.

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Permalink Reply by SL on August 23, 2008 at 9:38

We usually pay yearly, but someone said we needed to pay quarterly estimated tax now. How do you know?

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Permalink Reply by D Methvien on August 23, 2008 at 13:07

I have heard you only need to pay quarterly if you are going to receive a substantial amount of money. Someone I know got $84.000.00 and had to pay $28,000 in taxes so they paid it in the quarter that they received the bonus money. They did an estimated tax return.

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Permalink Reply by VSC DeSoto South on August 23, 2008 at 13:15

I would check with the IRS, call their 800 numbr and ask them to tell you if you need to pay the estimated tax, quarterly.
I called, they asked me about my other income salary+ rents due for house I rent out + lease bonus = aprx more than 100k less than 200k, I was surprised because they told me I did not need to fill out the quarterly.
Maybe if Kathy Morgan is around she could shed more light on this.

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Permalink Reply by Kathy Morgan on August 23, 2008 at 13:18

Use the chart in my earlier reply to guesstimate what your taxes will be. Then see how much you are paying in from other sources (ie. withholding on paychecks, etc).
Normally, if you are not going to owe more than $1000 you won't have a penalty. If you pay in at least what your tax liability (line 57, 1040; line 37, 1040A; or line 10, 1040EZ) from your 2007 return or 90% or your tax liability from 2008 you should also be exempt from a penalty.
If it looks like you are going to owe a penalty or you don't want a big bill at the end of the year you have a couple of choices. You can increase your withholding on your other sources of income or you can make a couple of estimated payments. There are two quarters left (Sept 15 and Jan 15) for payments so you just take what you estimate you will owe and pay half each quarter. You can access estimated payments forms at the IRS website here:

http://www.irs.gov/formspubs/lists/0,,id=97817,00.html

Make sure you put the primary taxpayers SSN on the memo line of the check and "2008 Estimated Taxes" so they will know where to credit the payment if the check gets seperated from the payment slip.
Same basic theory and criteria for the Louisiana return.

Hope that helps

Kathy Morgan, Enrolled Agent
H&R Block Master Tax Advisor

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Permalink Reply by SL on August 23, 2008 at 15:32

Thank you so much! It definitely helped. I really appreciate it so much!

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