Sign on Bonus

[jstoudemire]

I received a 5k sign on Bonus in 2017 that was taxed heavily. I left the company this year and they are asking for the whole 5K back. How do I ensure I receive the tax back I paid on the original 5k?"

[Carl]

You will report the payback on your 2018 return. Just make sure you get a valid receipt or whatever as proof of payback. That proof will need to stand up in court should it come to that. (I doubt it will, but that's how important it is to get solid undeniable proof of the payback, unless you have no problem with paying taxes on money you don't get to keep.) Without that proof, you didn't pay it back no matter how much you scream, holler, threaten or yell.

[krmsv]

Make sure you get a receipt for sure, just like you would get a pay stub.  The amount you pay back would need to be reduce off your income earned on your W-2.  Any overpaid taxes would need to be refunded to you.