Won an incentive trip in 2013, left employer in 2014, received an earning statement with no cash but a huge tangible bonus listed
"I had experience working for a company that manufactures stuff and giving products to the employees. The condition was to stay employed for a year after the gift for the company to cover its cost (I think they imputed the tax), otherwise they'd add the cost to the last paycheck (which they did when I left). But they were straight-forward about it and I signed a paper acknowledging it. However, in your case you didn't get a product (that you could return when leaving if you didn't want to pay), but rather a service. The ""winning"" trip was definitely supposed to be reported as income to you last year. Is it okay for them to treat me differently than the others for tax purposes? Of course not. But it may be that some strings were attached to the winning of the incentive trip (for example, you're required to stay employed for X time for the company to cover the expense). See my example above. Maybe it was buried somewhere in small letters. Can they do this a year after the trip was won and redeemed? As I said - in this case this sounds shady. Since it is a service which you cannot return - you should have been taxed on it when receiving it. Would the IRS want to know about this fuzzy business trip practice? How would I report it?  Here's how you can let them know. Besides now understanding the new level of slime from my former   employer is there anything else I should be worried about? Could they   do something like this every year just to be annoying? No, once they issued the last paycheck - you're done with them. They cannot issue you more paychecks after you're no longer an employee. In most US States, you are supposed to receive the last paycheck on your last day of work, or in very close proximity (matter of weeks at most)."
"The company itself doesn't benefit. In most cases, it's an expense as the match that many offer is going to cost the company some percent of salary.  As Mike said, it's part of the benefit package. Vacation, medical, dental, cafeteria plans (i.e. both flexible spending and dependent care accounts, not food), stock options, employee stock purchase plans, defined contribution or defined benefit pension, and the 401(k) or 403(b) for teachers. Each and all of these are what one should look at when looking at ""total compensation"". You allude to the lack of choices in the 401(k) compared to other accounts. Noted. And that lack of choice should be part of your decision process as to how you choose to invest for retirement. If the fess/selection is bad enough, you need to be vocal about it and request a change. Bad choices + no match, and maybe the account should be avoided, else just deposit to the match.  Note - Keith thanks for catching and fixing one typo, I just caught another." "Daniel covered the correct way to file on the returns, I'm chiming in specifically to discuss the question of whether it could be a gift. The IRS will classify it as a tip even if the person giving it says it's a gift if a service was rendered before the gift was given. The only way that you could make a case to the IRS that it was a gift is if you have a personal relationship outside of the working environment, and the person giving the gift provides an explanation for the motivation behind the gift.  Such explanations as ""Happy Birthday"" or ""Congratulations on graduating"" or other special occasions could be gifts. But ""you did a good job, and I just want to reward you for your effort"" is not a reason someone gives a gift, and the IRS will penalize you if you do not have evidence that it was a gift rather than a tip." It's legal. In fact, they are required to do this, assuming you are in fact a HCE (highly compensated employee) to avoid getting in trouble with the IRS. I'm guessing they don't provide documentation for the same reason they don't explain to you explicitly what the income thresholds are for social security taxes, etc - that's a job for your personal accountant. Here's the definition of a HCE:  An individual who: Owned more than 5% of the interest in the business at any time during   the year or the preceding year, regardless of how much compensation   that person earned or received, or For the preceding year, received   compensation from the business of more than $115,000 (if the preceding   year is 2014; $120,000 if the preceding year is 2015, 2016 or 2017),   and, if the employer so chooses, was in the top 20% of employees when   ranked by compensation. There are rules the restrict distributions from plans like 401ks. For example, treasury reg 1.401a(4)-5(b)(3) says that a plan cannot make a distribution to a HCE if that payment reduces the asset value of the plan to below 110% of the value of the plan's current liabilities. So, after taking account all distributions to be made to HCEs and the asset value of the plan, everyone likely gets proportionally reduced so that they don't run afoul of this rule. There are workarounds for this. But, these are options that the plan administrators may take, not you. I suppose if you were still employed there and at a high enough level, a company accountant would have discussed these options with you. Note, there's a chance there's some other limitation on HCEs that I'm missing which applies to your specific situation. Your best bet, to understand, is simply ask. Your money is still there, you just can't get it all this year. Indeed the IRS publication references the 3-6 year time span. And no limit for fraud.  But. I get a notice that some stock I owned 10 years ago has a settlement pending, and the records of this stock purchase and sale would potentially get me back some money.  I get my Social Security statement (the one they stopped sending, but this was before then) and I see the 1995 income shows zero.  Both of these were easily resolved with my returns going all the way back, and my brokerage statement as well. For the brokerage, I recently started downloading all statements as PDFs, and storing a copy away from home. Less concerned about the bank statements as I've never had an issue where I'd need them. "This article is bogus. There may be companies where you would experience what the author describes, but it's not true where I work (I manage a department of 54 in a megacompany with 350k employees worldwide).   ""The books are cooked. Corporate boards must approve labor budgets, raises, and bonuses pretty early in the calendar year. "" It's true that the total department budget is set, for example, by June. You might take 4% of everyone's salaries and reserve that for raises to be allocated in the future. That doesn't mean everyone gets 4% increase, though. Some may not be eligible for increase--for example, if they've been there for 6 months or less. Some may underperform, meaning they get 2% or 0%. And some may exceed expectations, so they get 6%. Performance definitely matters.  ""Nobody knows how to talk about performance."" Well, that's quite a blanket statement, isn't it? True, it's /difficult/ to talk about a person's performance. And there's certainly room for managers to improve /their/ performance and ability to give feedback. But I've had plenty of bosses that know how to give good feedback and do so throughout the year (not just a year-end). I also believe that I'm pretty good at it--at least my employees have indicated that I'm improving :)  ""Unfortunately, you are not as fabulous as the executives in your company. Large bonuses are given at the top, which means that someone needs to be held accountable. Even if you've met and exceeded your goals for the year, that someone is you."" I'm not even sure how to respond to that one. The author needs some holiday cheer, I think. Large bonuses are given at the top, true. What does that have to do with a not-at-the-top employee's accountability? The points don't seem to be related.  ""Managers really love forced ranking."" Not true. Forced ranking sucks, isn't fun and is difficult. I believe good managers care for all of their employees. (Bad managers are something else altogether...)  ""Even if you rock, there isn't much money to go around"" The first accurate sentence in the article, woohoo! However, the author doesn't take into account at all that money isn't everything. Surveys of what motivates employees consistently shows that money isn't number one. Things like having a challenging job and working on important products usually come out over dollars-and-cents. And hey, we've built a real crappy economy. What do you expect?  ""As you participate in the end-of-year performance management process, the best thing you can do is to stay neutral, remain dispassionate, and be quiet."" I really take issue with this statement. DON'T DO THAT (please). Use the opportunity you  have with your boss to discuss her or his expectations and what you can change so that you meet them or exceed them. If you're already exceeding expectations, ask how you can take on new work, how you can contribute to the welfare of your fellow employees. This is how you get ahead.   ""Nobody really gets rich, anymore, from being a regular employee."" Getting rich depends on how you spend and save, not so much on how much you make." You already received a tax deduction, more or less, as you didn't pay tax on this income. Beyond that, no; the money is lost if you don't spend it.  See this explanation for example, among many others; it's specific to FSA, but they work generally the same way. To go into a bit more detail, read the IRS publication on the subject; basically, what's happening here is that you're receiving a fringe benefit, rather than salary.  So yes, you agreed to voluntarily reduce your salary by $255 or whatever per month in exchange for funds in this account. As such, they're nontaxable, which both your employer and you find helpful; but the downside is it's not really your money - it's a fringe benefit.  Nice that it's tax free, and dissimilar to a medical or dependent care FSA, it doesn't have an expiration date; but it does go away when you leave your employer, and you don't get it back.  It's money you never had. "I have a quick question about statement of cash flows and how Account Receivable (Net) and Prepaids affect it (I've already asked the accounting subreddit but was wondering if anyone who does fundamental analysis etc would have a take on it).   It stems from a homework problem where I have to reconstruct a cash flow statement using two comparative balance sheets (end of period 2013 and end of period 2014) and a change in retained earnings statement.  The following transaction took place in 2014   ""The firm wrote off accounts receivable as uncollectible totaling $16,300 in 2013 and $18,500 in 2014. It recognized expired insurance of $4,100 in 2013 and $3,900 in 2014.""  My understanding is that the write offs have already been subtracted in order to yield Account Receivable (Net) and therefore I can just take the change in that account and make the appropriate entry.  For the recognition of expired insurance I can simply take the change in the Prepayment account and record the appropriate cash flow entry.  Am I correct in assuming this? Or did they give me those amounts in order to figure out Accounts Receivable (Gross) and take the change in that?" Your withholding is taken out of your pay. So if you do YTD+withholding - you count the withholding twice, that's why it doesn't add up for you. The simple answer is to check your written contract/offer letter. See if it matches what you see, or what you expected to see. If the offer/contract states $36K - check with the payroll person at work why the discrepancy. If you don't have any written proof of the agreed amounts (don't know if it is legal, check local laws on the requirements of documenting employment terms), then it is up to you and your employer to sort it out. However, keep in mind: if you don't have any written proof and the employer is unwilling to adjust - one (judge?) would wonder: you've been getting paychecks monthly, which clearly state that your annual salary is $35K. Why did you wait so long to sort this out? This is tax fraud, plain and simple. I recently wrote an article The Step Transaction Doctrine, in which I explain that a series of events may each be legal, but aggregate to one transaction and the individual steps are ignored.  In this case, it goes beyond that, by accepting $5/mo you are already outside the tax code. As littleadv noted, you can't work for a legitimate business for free and not expect to have some kind of issue. The $14K/yr gift isn't a bona fide gift, but ties to that work. "Did I do anything wrong by cashing a check made out to ""trustee of   <401k plan> FBO "", and if so how can I fix it? I thought I was just   getting a termination payout of the balance. Yes, you did. It was not made to you, and you were not supposed to even be able to cash it. Both you and your bank made a mistake - you made a mistake by depositing a check that doesn't belong to you, and the bank made a mistake by allowing you to deposit a check that is not made out to you to your personal account. How do I handle the taxes I owe on the payout, given that I had a   tax-free 1099 two years ago and no 1099 now? It was not tax free two years ago. It would have been tax free if you would forward it to the entity to which the check was intended - since that would not be you. But you didn't do that. As such, there was no withdrawal two years ago, and I believe the 401k plan is wrong to claim otherwise. You did however take the money out in 2014, and it is fully taxable to you, including penalties. You should probably talk to a licensed tax adviser (EA/CPA licensed in your State). My personal (and unprofessional) opinion is that you didn't withdraw the money in 2012 since the check was not made out to you and the recipient never got it. You did withdraw money in 2014 since that's when you actually got the money (even if by mistake). As such, I'd report this withdrawal on the 2014 tax return. However, as I said, I'm not a professional and not licensed to provide tax advice, so this is my opinion only. I strongly suggest you talk to a licensed tax adviser to get a proper opinion and guidance on the matter. If it is determined that the withdrawal was indeed in 2012, then you'll have to amend the 2012 tax return, report the additional income and pay the additional tax (+interest and probably underpayment penalty)." "In the normal course of events, you should receive a separate check for the amount of the purchase, and that amount should not be included in your wages as shown on your W-2 statement.  If the amount is included on your paycheck, it should still be listed separately as a non-taxable item, not as part of wages paid.  In other words, the IRS should not even be aware that this money  was paid to you, there is no need to list the amount anywhere on your  income tax return, and if you are paranoid about the matter, staple the stub attached to the reimbursement to a copy of your bank statement showing that you deposited the money into your account and save it in your file of tax papers for the year, just in case the IRS audits you and requires you to document every deposit in your checking account.  The amount is a business expense that is deductible on your employer's tax return, and your employer is also required to keep documentation that the  employee expense reimbursement plan is running as per IRS rules (i.e., the employer is not slipping money to you ""under the table"" as a reimbursement instead of paying you wages and thus avoiding the employer's share of FICA taxes etc) and that is why your employer needs the store receipt, not a hand-written note from you, to show the IRS if the IRS asks. You said you paid with ""your own cash"" but in case this was not meant literally and you paid via credit card or debit card or check, then any mileage award, or points, or cash back for credit card use are yours to keep tax-free, and any interest charges  (if you are carrying a revolving balance or paid through your HELOC) or  overdraft or bounced check fees are yours to pay." * 2007 Accountant communicate with bosses about the ethical problem and possible illegal practices * Next years, Accountant work in complicated work environment ending with superiors retaliated against him for speaking out * 2012 Accountant hand over to IRS, and OSHA, a 137 pages of document proving how Cat swift billions in profit to Switzerland to avoid U.S. taxes * 2012 Accountant quits company * 2013 IRS concluded on abusive tax and demanded $ 2 billion * 2014 a U.S. Senate investigative committee, grilled executives and concluded the company had avoided taxes on more than $8 billion in revenue. * February 2017,  “I love Caterpillar,” President Orange Donald Clown says. * March , 2017, the IRS, Department of Commerce, and Federal Deposit Insurance Corp. raid Caterpillar headquarters, warehouses and datacenter.  * IRS standards payment is 15% to 30% of what it collects. "As the comments above have been trying to get across, the prospective employer is offering to pay you for the bonus/unvested compensation that you would be losing by jumping ship right now to go work for them.  They are not offering to buy any securities that you already hold, regardless of whether they're profitable or unprofitable. Example 1. You participate in your current company's 401(k), and your company matches your contributions at 50%.  However, the matching funds are not yours immediately; they vest in 20%/year increments until you have been at the company for 5 years.  Let's say you've been there for 3 years and have contributed $50K to the plan.  Your company has matched you at $25K, but only 60% of that ($15K) has vested.  If you leave right now for the new employer, you're leaving $10K behind.  So the new employer might offer to ""buy out"" (i.e. pay you) that $10K to help encourage you to switch now.  You might then counter their offer by pointing out that if you stay where you are that $10K is coming to you tax-deferred, whereas their $10K signing bonus would be taxed.  So you ask for $15K instead. Example 2. You work for a Wall Street investment bank.  Each December you receive a performance bonus.  Since you began working there, your three yearly bonuses have been (in chronological order) $500K, $750K, and $1M.  It's June, so you've worked halfway towards your next bonus.  You have a lot of incentive to NOT leave your current employer.  A competing employer may offer to ""buy you out"" of your anticipated bonus by giving you a $1.25M signing bonus (since you'd almost certainly not be eligible for a performance bonus during your first year there).  You might negotiate with them and say ""I'm on track for $2M this year"", and then they would figure out if you're really worth that much to them. So you can see this all has to do with the prospective employer trying to compensate you for any income you're already counting on receiving from your current employer.  By jumping ship now you would be foregoing that guaranteed/expected income, so the competitor wants to remove that anchor that might be holding you back from making the move. Stocks/options that you already own are irrelevant to the prospective employer.  Since you wouldn't be giving those up by changing jobs, there's no reason for them to factor into the equation." I know people who work in the gulf and most contracts are of the 14 days on/ 14 days (or so) off flavor. I've never heard of someone being onboard a ship or platform for a year. I bet this is a scam. I guess that means I should be making about $250k a year right now.  I've been at my company for 16 years.  The wage and profit sharing program beat the market wages in my area by a wide margin.  Not all companies are interested in screwing their employees.