Returning a signing bonus

Discussion in 'Tax' started by markdiver, Mar 12, 2005.

  1. markdiver

    markdiver Guest

    I recently started a new job in which they were nice enough to give me
    a signing bonus. Unfortunately I dont like the job very much and think
    I may leave soon.

    When I got the bonus I was told that if I voluntarily leave
    within 12 months I have to pay it back, which sounds fair,
    but the problem is that I got the bonus the first week that
    I started, before I filled out a W2 and got hit hard on
    taxes.

    My question is, if I leave this job and they ask for the
    full amount back, do I have any recourse on my taxes ? Can I
    deduct the full pretax amount from my income taxes next
    year, or do I just lose out on the difference between what
    they gave me and what I really received after tax?

    Thanks,

    Mark.
     
    markdiver, Mar 12, 2005
    #1
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  2. markdiver

    A.G. Kalman Guest

    If you make a repayment in 2005 for income you were taxed on
    in 2004, you do have recourse assuming that you have a tax
    liability in 2005. The answer is on pages 31 to 32 under
    "Repayments" in IRS Pub 525.
    http://www.irs.gov/publications/index.html
     
    A.G. Kalman, Mar 14, 2005
    #2
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  3. markdiver

    D. Stussy Guest

    See the tax topic "Claim of Right." That's what you have.

    Note that if under $3k, you must take the Schedule A
    deduction. If over $3k, you have the choice of the
    deduction or the tax credit version - and usually, people go
    with the version that produces the larger tax benefit.
     
    D. Stussy, Mar 17, 2005
    #3
  4. markdiver

    markdiver Guest

    Thanks !
     
    markdiver, Mar 17, 2005
    #4
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