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Returning a signing bonus

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.

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Reply to
markdiver
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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.

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-- Alan

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Reply to
A.G. Kalman

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.

Reply to
D. Stussy

Thanks !

Reply to
markdiver

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