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Question about a work bonus and taxes
Posted on 10/20/21 at 3:03 pm
Posted on 10/20/21 at 3:03 pm
I could potentially be starting a new job soon that has a sign on bonus. The bonus would be paid in full a week or two after starting. However, if I leave the company before the 2 year mark, I would have to pay it back in full. Do I have to claim that on this years taxes or in 2 years?
5
Posted on 10/20/21 at 3:06 pm to DonaldPump
You will claim it in the year it's paid to you. If you have to pay it back later get a corrected W2 from your employer and file an amended return
Posted on 10/20/21 at 3:43 pm to jchamil
quote:
You will claim it in the year it's paid to you. If you have to pay it back later get a corrected W2 from your employer and file an amended return
Posted on 10/21/21 at 4:56 am to DonaldPump
My opinion, don’t take the bonus, and I’ll explain why.
It’s a too good to be true deal in most cases. If you leave, you will owe it back in the full amount pre-tax plus interest. Companies who offer this are doing so for a reason. Leverage. Don’t take it, you have the leverage. 2 years seems short, but it’s an eternity of you find yourself hating the role.
I worked at a large corporation for 18-Months that went through 2 Private Equity changes and eventually bankruptcy in that window. I took a relocation bonus and sign on bonus when I started. A week in I knew it was a bad situation and I literally couldn’t afford to take better jobs that were offered because of it. Only reason I got out 18 months in was a department termination. Biggest sigh of relief I’ve ever had being let go. Worst 18 months of my life.
TLDR - Do major due diligence on the role and your desire to work in it before accepting. This can backfire.
It’s a too good to be true deal in most cases. If you leave, you will owe it back in the full amount pre-tax plus interest. Companies who offer this are doing so for a reason. Leverage. Don’t take it, you have the leverage. 2 years seems short, but it’s an eternity of you find yourself hating the role.
I worked at a large corporation for 18-Months that went through 2 Private Equity changes and eventually bankruptcy in that window. I took a relocation bonus and sign on bonus when I started. A week in I knew it was a bad situation and I literally couldn’t afford to take better jobs that were offered because of it. Only reason I got out 18 months in was a department termination. Biggest sigh of relief I’ve ever had being let go. Worst 18 months of my life.
TLDR - Do major due diligence on the role and your desire to work in it before accepting. This can backfire.
Posted on 10/21/21 at 6:38 am to LSUShock
My last job had a sign on bonus with a two year commitment. Paid out after the 1st month on the job. Didn’t take long for me to realize I hated the place I worked at (not so much the job). I stuck it out for 8 months because I didn’t want to pay back the signing bonus. Finally couldn’t take it anymore and found another job. The company never came after the sign on bonus even though I signed documents saying I would have to.
From what I’ve heard, paying back the sign on bonus really depends on a few factors with the main one being the company actually pursuing it.
From what I’ve heard, paying back the sign on bonus really depends on a few factors with the main one being the company actually pursuing it.
Posted on 10/21/21 at 8:18 am to DonaldPump
quote:
I could potentially be starting a new job soon that has a sign on bonus. The bonus would be paid in full a week or two after starting. However, if I leave the company before the 2 year mark, I would have to pay it back in full. Do I have to claim that on this years taxes or in 2 years?
I'm assuming this is a pretty small bonus (like less than a normal paycheck) otherwise this company is doing something insanely dumb.
I get that some places are desperate but if we're talking a big sign on bonus they expect to get back if you leave no way do they get a lot of those back.
This post was edited on 10/21/21 at 8:19 am
Posted on 10/21/21 at 8:35 am to DonaldPump
I liked how my company handled the sign on bonus years ago.
Was a 3-year deal. I got the money a couple of ways.
1) at the three year anniversary if still employed I got the bonus
2) if the company let me go before the three year anniversary I got the bonus
3) if I chose to leave before the three year anniversary I got no bonus.
Was a 3-year deal. I got the money a couple of ways.
1) at the three year anniversary if still employed I got the bonus
2) if the company let me go before the three year anniversary I got the bonus
3) if I chose to leave before the three year anniversary I got no bonus.
Posted on 10/21/21 at 9:19 am to DonaldPump
good luck at halliburton.
Posted on 10/21/21 at 12:12 pm to LSUShock
quote:Just curious, but what would you have done if you didn't take the bonus and 1 week knew it was a bad situation?
A week in I knew it was a bad situation and I literally couldn’t afford to take better jobs that were offered because of it.
Posted on 10/21/21 at 12:50 pm to thunderbird1100
That is very strict.
With my current job i got it on the first paycheck. If leaving prior to 1 year, I would have to pay back the prorated amount
With my current job i got it on the first paycheck. If leaving prior to 1 year, I would have to pay back the prorated amount
Posted on 10/21/21 at 4:10 pm to LSUShock
quote:
I took a relocation bonus and sign on bonus when I started. A week in I knew it was a bad situation and I literally couldn’t afford to take better jobs that were offered because of it.
I get the relocation bonus could have been spent on moving, but 1 week into a job you had already spent the entire bonus and didn't have the ability to pay it back? What the hell did you spend it on if it was too much money for you to pay back and kept you in a job you hated?
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