I joined this non-MSFT place and I want to leave in less than 2 years. I need to return back my joining bonus (offer letter says gross value). I've read that that you can claim back the tax that was paid on the amount, from the IRS. Has anyone done that? Is it more/ less complicated if the tax was paid in a different assessment year and the claim is made in a different year?
Ones I filed taxes wrongly ( my first time doing it ).Year later I found it out , so found out IRS has special “correction” form 1040X which I filed and sent by mail and they actually sent me check with difference:)
There are complexities, talk with a CPA.
IRS publication 525, for repayment info 🙂
Yeah I read this and another one, I want to find people who've done this in reality
I have done it. Make sure to send your supporting material with the tax return: the letter asking for repayment, copy of your repayment check, bank statement showing check cleared and email communication copies.
Thanks for the reply man. Did you you do it in the same assessment year?
I'm not a tax accountant and I haven't done this myself, so take this for what its worth, but I don't think it matters what tax year the payment and the repayment happen. You aren't changing your tax return for the year you received the payment. You paid the tax for that year. This year, you would basically have a "negative" income of whatever you pay back. So you will lower your tax burden this year effectively getting your tax back on that repayment. You aren't actually changing your income for the previous year so you don't need to amend the previous return.
Don't have first hand experience, but I'd expect it to show up as a loss on the year you pay it back, which would offset income and basically get your taxes back (maybe at a different % than you paid, though). "Gambling losses" might not be too far from the truth 🤣
Hmm, I suppose you check with HR - I guess you will be required to return “net”
No. Gross joining bonus, someone who left before me paid gross. If I check with HR, they'll know I'm planning to leave.
That sucks, is it prorated or full? Almost unethical