Repayment of Bonus

[StKo1225]

I earned a bonus (that required one year of service from that date) that was net of taxes in December 2018 that I had to re-pay in full on August 2019 since I left my job. How do I receive the roughly $1K in taxes that I paid on the bonus back?

[AmyC]

Since you repaid more than $3,000 in 2019, you can take the credit on your 2019 return. Here is how:

2018:

1. Write down your 2018 tax liability the way it was filed.
2. Go into your 2018 and reduce the income by the $xxxx that you paid back. Look at the new tax liability.
3. Write down the new tax liability.
4. Subtract the new tax liability from the original. This is how much you overpaid and is part of your 2019 credit.

2019:

Use the desktop program. If you are online, easy to switch. See below

Your 2018 over-payment is your credit. This is your right of claim credit. 

This becomes a credit on your return labelled as IRC 1341. This is schedule 3, line 13.

• If you are online user, and have not purchased your software, simply buy the desktop version and download your .tax file so you don't have to do your taxes again. Any trouble, call support, link below. Here are desktop options.
• If you have paid for your online taxes, call support and tell them the desktop program is required.

• Please use the following link for a customer support number.

[StKo1225]

How do I access the 2018 Turbo Tax File to calculate the new tax liability? I have the CD for 2018 and the have the 2018 Turbo Tax file saved to my computer.  Do I just re-install the software? Also it appears I paid 860 dollars of tax on the 3K bonus meaning it was taxed at about 30 percent. would the Turbo Tax 2018 factor in this higher tax rate? Looks like my effective tax rate for 2018 was 10 percent.

[VictoriaD75]

Yes. You can reinstall the 2018 software. The withholding will be different than your overall tax liability. Generally, withholding on bonuses is at a greater amount than salary and wages. You want to review your total tax liability, which would have been reported on line 15 of Form 1040 in 2018.