Originally Posted by
Blackhawk
So I'm looking at about a $40K signing bonus.
1. Looking at deferring class from mid December 2017 to mid January 2018 for tax purposes as that would put us in the top tax bracket for 2017 (wife works as well). Thoughts?
2. Signing bonus comes with a two-year prorated contract. My intent is to just invest the signing bonus and sit on it. If I make it to a major prior to the two years, give back what I owe. If I do need to pay back part of the signing bonus, how do I figure that for taxes? File an amended return?
Thanks.
Let's say you're at the top of the 35% tax bracket: making exactly $470,700, married and filing jointly. The difference between the top tax bracket and the 35% tax bracket is 4.6%. On a $40,000 bonus, that's a $1,840 "penalty" for accepting the bonus this year, instead of possibly accepting it next year, when your income may be lower (which it sounds like you expect).
It's not correct that it "puts [you] in the top tax bracket for 2017." It puts every dollar you make above $470,700 in the top tax bracket. It's confusing. It's irritating to calculate. But that's how it works. This is "progressive" taxation.
Here's a good reference for the tax treatment of a repaid signing bonus:
https://ttlc.intuit.com/questions/26...-2014-tax-year