Originally Posted by
Mil2Cil
They tax at an estimated 30%, so do you pay out of pocket (what the IRS took) until you get a correct w-2? Anyone that's actually done it would be greatly appreciated!
I realize this is 2.5 months late, but for future reference:
Assuming you are paying back in a different tax year (e.g., you were paid the bonus in 2016 and repaid in 2017), IRS Publication 525 covers the situation under Repayments. There are two methods (assuming you repaid more than $3000), and you get the pick whichever is more beneficial.
1. Claim a deduction on your 2017 return for the amount of the repayment
2. Claim a credit on your 2017 return for the difference in the amount of tax your would have paid in 2016 vs. what you actually paid. Example: credit = 2016 tax paid with bonus - 2016 tax you would have paid had you not received the bonus.
I believe the desktop version of TurboTax will do this calculation for you, but not the online version for some reason.