Paying Taxes on bonus/royalties

I have a question regarding paying the taxes on a signing bonus that was received. I received to bonus check and there were no taxes taken out of the check. My understanding is that this check is treated as Royalties and is taxed as regular income. My question is how do I pay the taxes now so I don't get a penalty if I wait till filing next year? Do I just file a quarterly estimated income with the IRS and send them a check? Any help would be appreciated.

Nate

Mr. Preston…

Appreciate the response… I kind of thought this but was hoping it wouldn’t be so painful…

Thanks Nate

I believe it is passive income.

The IRS categorizes income into three broad types, active (earned) income, passive income, and portfolio income. It defines passive income as income from “trade or business activities in which you do not materially participate.”

Bonus dollars are classified by the Service as prepaid royalties, but allow no depletion allowance.

Perhaps a CPA can confirm that bonus dollars are earned income in the case of an ordinary royalty owner.

Susan Nolen said:

I believe it is passive income.

Susan/Buddy…

Thanks for the feedback… Guess it looks like I still have some homework to do… May contact the IRS directly… But, from everything I’ve been reading… it seems like this will be considered income and I’ll need to file the quarterly estimated forms…

Thanks Nate