Discussion:Signing bonus - returned...
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| 26 March 2006 | |
| If a taxpayor rec'd a signing bonus in 2005, but did not satisfty the terms of the agreement by leaving the employee of the bonusing employer and also left their employment in 2006 before the bonus was 'earned' and must repay the signing bonus... in 2006
1) Are there any adjustments to the 2005 earnings that can be made 2) When does the ex-employer have to issue a revised or negative W-2 Retrieved from "http://www.TaxAlmanac.org/index.php/User_talk:Klatshaw" | |
| 26 March 2006 | |
| Since the income was repaid in 2006 no adjustment can be made to the 2005 return. If the repayment is $3K or under, it will be a 2% miscellaneous itemized deduction on the 2006 Schedule A. If over $3K, it can either be claimed on the 2006 Schedule A or a credit can be taken on the 2006 1040 for the 2005 tax difference caused by that income. | |
| 19 December 2006 | |
| Sorry, the following are additional questions related to the topic discussed previously...
Is the employee able to repay the employer the $3K less some of the taxes that were originally withheld? If yes, which ones? Also, if the employee is also entitled to vacation pay from his employer can the gross bonus repayment be applied against the vacation pay, and only taxes paid on the excess of vacation pay (assuming that it was higher than the bonus). Thank you | |
Inagpurwala (talk|edits) said: | 20 March 2007 |
| My client has the same situation as describe by Klatshaw.
W2 does not reflect reduction of re-pay of bonus (clent worked six weeks in 2006 for same employer). Compare last pay check with W2. Company got sold. Difficult to get corrected W2 (per client). Client is not filing Sch A (Std deduction is higher). Question: In this situation where and how to show reduction in txable wages? Thanks IshaqInagpurwala 17:45, 20 March 2007 (CST) | |
