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Old 08-07-2017, 05:40 PM
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Repayment to Former Employer

I recently had to leave a company I was hired at and I was under an agreement to repay them for training I received if I left before x amount of time. How do I claim this on my taxes? Is the repayment amount considered a training expense?



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Old 08-07-2017, 11:02 PM
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Originally Posted by Vika View Post
I recently had to leave a company I was hired at and I was under an agreement to repay them for training I received if I left before x amount of time. How do I claim this on my taxes? Is the repayment amount considered a training expense?
I recently had to leave a company I was hired at and I was under an agreement to repay them for training I received if I left before x amount of time. How do I claim this on my taxes?=========>> You can deduct your repayment money on Sch A of 1040 Line 27 aslongas you itemize deductions on your return(if not you can not claim it). Alternately you can figure your taxes with and without the bonus for a tax year and compare that to the taxes for another tax year with the deduction, and do whatever is best. If adjusting your taxes for the first year works better, you give yourself the appropriate credit on 1040 Line 70 of the next tax return. You do not amend the first tax year returnYou don't go back and amend the prior year return.
Generally, you have to repay the full amount of any sign on bonus when the repayment occurs in a year after that in which the bonus was paid. However, If your bonus was included on your original W-2, you were ALSO charged for social security taxes, and you can get those back, tooYou need to tell your employer to issue a revised W-2 so he can save the same amount of money on HIS portion of the social security taxes and unemployment taxes. the employer should also refund the Social Security and Medicare taxes that were paid on that income. The employer should give you a statement that shows the amount of SS and Medicare tax that you paid on the returned bonus. If the employer does not refund those taxes, you can file Form 843 to claim a refund of those overpaid taxes.


Is the repayment amount considered a training expense?=========>>FOR YOU? as said above no. your w2 wages/ bonus or whatever will be adjusted accordingly, and you can claim the taxes back on your return as said either on sch a of 1040/ tax credit. Tactically, this can get slightly more complex as to whether or not you this occurs in a single calendar year, or crosses over two years



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Old 08-08-2017, 12:21 AM
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Thank you for the reply, I think I understood, but I'm confused about it being a "bonus". I began paid training with this company and earned about $360 after taxes, but left shortly after and now owe them $450 because of the contract I signed to work for them. These are rather small amounts, but I basically lost $90 and any taxes they took out?



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Old 08-08-2017, 01:17 AM
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Originally Posted by Vika View Post
Thank you for the reply, I think I understood, but I'm confused about it being a "bonus". I began paid training with this company and earned about $360 after taxes, but left shortly after and now owe them $450 because of the contract I signed to work for them. These are rather small amounts, but I basically lost $90 and any taxes they took out?
If an employee asks to go on a training course, many employers will get staff to sign an agreement to repay all or part of the training cost if they leave within a certain period. Some employers will demand full repayment if the employee leaves within two years, even if the training is obligatory.
If you received the small compensation or etc in the same year it was repaid, then the amount should not be included on your W-2.However, aslongas it is included on your W2 then, you can claim , as said previously, the tax of $90 that you paid on your return. You can deduct your repayment of $450 on Sch A Line 27. Alternately you can figure your taxesof $90 with and without the bonus for the first year and compare that to the taxes for the next year with the deduction, and do whatever is best



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