Can my husband have his employer write his bonus check directly to a medical provder?

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Can my husband have his employer write his bonus check directly to a medical provder?

The medical cost is completely legitimate and a recognized therapy in the state of Wisconsin-nothing experimental. We have the bills straight from the therapy provider along with all the statements of what the insurance will and will not cover. The employer would be willing to do this, especially I am sure if it can be included under insurance/medical coverage costs for the business. For my husband and myself, it avoids receiving and paying taxes on a bonus which in effect would go straight to pay for this medical therapy.

Asked on March 13, 2012 under Employment Labor Law, Wisconsin

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

It would not affect your tax liability. A bonus is income--whether or not that income is paid directly to you, or is paid to reduce some debt you owe, it is still  income and will be taxed as income. People cannot escape or avoid taxes by having payments made directly to vendors or creditors; for example, even if your employer were willing to write your rent check, pay for  your gym membership, pay your auto loan, etc., you'd still have to pay income tax on those amounts. Any monies earned for working, no matter how paid, are income and are taxed unless and only to the extent the law specifically states otherwise (e.g. tax defered contributions to a 401k plan).

It doesn't matter that the business could deduct it as a business expense--what the employer can do with its taxes has no bearing on your tax liability. Besides, a bonsus is already tax deductible for an employer as a business expense--employees and their compensation are business expenses.


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