Hi - due to reasons outside of the scope of this post, I'm leaving my job within 1 year and need to pay back $10k paid by my current employer for relocation expenses+tax gross-up.
My new employer has agreed to pay me $10k signing bonus to help cover this. However, I am concerned I will have to pay income tax on this $10k signing bonus (around $2.5k in taxes), which means I will be at a net loss of $2.5k.
1. Am I able to get a tax deduction on the $10k I pay back to my current employer (which would then offset the tax I pay on the $10k signing bonus)?
2. If so, would this work as a wage-reduction on this year's W2 or some other tax method? Does it matter if I am doing standard deduction or itemized deduction?
