Money

Returning gross value of joining bonus - how to get IRS refund?

Microsoft flying pi
4d

I received 10k joining/sign on bonus from a company in 2018 (gross 10k, tax 3.5k) I'm leaving in 2019, before the lock-in period ends. Contractually I'm required to repay the gross amount when I leave. So, I'm returning 10k from tax assessment year 2018, in tax assessment year 2019.

How do I get back the 3.5k from the IRS? Can I get it back sooner than April 2020? What do I need from the employer for this - assume employer is hostile and will not respond after I leave the place.
(not Microsoft, I joined another employer who I want to leave asap)

Have any of you done this in the past?

comments

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  • Financial Engines / Datafrugalguy
    You can to claim as income reduction in this year return. Some years go.. I did it.
    4d3
    • Microsoft flying pi
      OP
      Thank you. What paperwork do I need from the employer for this? I need to get all that I need before I leave... They'll not respond to me once I leave.
      4d
    • Financial Engines / Datafrugalguy
      At least in my case,. I received a bill from my company asking to pay back whatever I owed. I sent them a check. And it established all the paper trail. Irs won't ask unless you get an Audit for that idea.
      4d
    • Microsoft flying pi
      OP
      Thank you.
      4d
  • Intel gusope
    This will be part of this years tax assessment as you are returning it this year (doesnt matter which year it was paid, like how tax refunds work if you itemize) and it should show up on your w2. Basically it will reduce your income for this year, 2019.
    4d2
    • Microsoft flying pi
      OP
      The amount I'm repaying is greater than the income I've earned from the company this year. Have you done this kind of thing in the past?
      4d
    • Intel gusope
      I havent done this. I am not sure in the case of negative income.
      4d
  • Hmm, what are you worried about? They legally have to issue you w2 so you’ll definitely get it no matter what.

    What are you worried about?
    4d2
    • Microsoft flying pi
      OP
      How does the w2 show what I returned to them in a different assessment year? Are they required to retrospectively issue a new w2?
      4d
    • Hm, I see what you mean. You should call the IRS and ask them. Since this is related to your income, I’m sure there has to be a way for this to show up on the return that you file.
      4d
  • T-Mobile RelaxNGame
    You have to return 6.5k. You need not worry about the tax adjustment for 2019, the x company will have to deal with it because they are the receiver.
    4d1
    • Microsoft flying pi
      OP
      This is a hostile company. They will ask for the entire gross amount since that's what the offer letter says.
      4d
  • Jet.com / HR
    JD1234

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    I think you just pay 6.5 to the company since that money is gone . Another thing is company will not bother for 10k sign on. Too much work for them. Since you almost worked for a year, they may not aksk for full amount..
    4d1
    • Microsoft flying pi
      OP
      It's several times that, 10k is a sample number. And yes, I have to repay the gross amount.
      4d
  • Microsoft avR
    Use TurboTax, it has an option on that, you won't get the full return though. I had to pay 10k for former employee for relocation fees, tax gave me back about 1.5k... TurboTax has that option to declare it
    4d0
  • Oracle RealTalq
    Do pay them back. They won’t do anything about it. Amount is too small
    4d0
  • SAIC ibaouw6
    RelaxNGame is on point. You'll deal with it this year if your returning the money as part of a contract it'll reduce your income this year, just remember to track it. Also, to confirm how you should handle it you should ask the company your giving the money back how they will handle it... If they aren't providing you with an updated/corrected W2 then it's definitely not going to require you amend last year's filing.
    4d0

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