Airline Pilot Forums

Airline Pilot Forums was designed to be a community where working airline pilots can share ideas and information about the aviation field. In the forum you will find information about major and regional airline carriers, career training, interview and job seeker help, finance, and living the airline pilot lifestyle.




View Full Version : Bonus Payback - taxes?


Learbubba
05-02-2018, 04:08 PM
So I took the bonus at Envoy but ended up having to leave (family reasons) after 2 weeks. Here's the issue, I netted $11.5K of the $17.1 K bonus (taxes.) Well they want me to pay back $17.1K and say I'll get the rest back from the Govt next year. Anyone have any experience with this or know any way around paying back money I didn't get?


NoValueAviator
05-02-2018, 04:31 PM
Claim hardship and throw yourself on their mercy.

jonrayburn
05-02-2018, 04:35 PM
Tell ‘em, “tough tiddies, go ask the IRS for the rest.”


mojo6911
05-02-2018, 04:57 PM
You'll likely need real legal advice on this situation.

jonrayburn
05-02-2018, 05:19 PM
https://www.airlinepilotforums.com/envoy-airlines/112755-bonus-repayment-3.html

Toonces
05-02-2018, 06:14 PM
So I took the bonus at Envoy but ended up having to leave (family reasons) after 2 weeks. Here's the issue, I netted $11.5K of the $17.1 K bonus (taxes.) Well they want me to pay back $17.1K and say I'll get the rest back from the Govt next year. Anyone have any experience with this or know any way around paying back money I didn't get?

You will report it on your taxes as a miscellaneous itemized deduction under schedule A. Refer to the below link. If you pay someone to do your taxes, send them all your records of the bonus receipt and the bonus repayment.
https://taxmap.irs.gov/taxmap/pubs/p525-005.htm

pilotgolfer
05-02-2018, 06:23 PM
So I took the bonus at Envoy but ended up having to leave (family reasons) after 2 weeks. Here's the issue, I netted $11.5K of the $17.1 K bonus (taxes.) Well they want me to pay back $17.1K and say I'll get the rest back from the Govt next year. Anyone have any experience with this or know any way around paying back money I didn't get?

How soon do they pay you the bonus? I figured they would at least wait till you are done with training or checked out on line

havick206
05-02-2018, 06:28 PM
How soon do they pay you the bonus? I figured they would at least wait till you are done with training or checked out on line

The check is on your desk when your phone is walk into Indoc.

griff312
05-02-2018, 07:57 PM
I know for 2017 you should be able to itemize the deduction. But for 2018 and forward, I don't think you can, unless you can still beat the new (higher) standard deduction. But also keep in mind, you can't deduct as many things under the new plan, that you could before. But as someone wlse already said, this is a unique situation, so you may need to consult a tax attorney.

EmbaeDriver
05-02-2018, 08:35 PM
Change your phone and email. No way to contact you! :)

flysooner9
05-02-2018, 08:41 PM
I was told you’d just file a corrected W2 the next year.

Subpilot
05-02-2018, 08:48 PM
on your W2 for 2018, I assume the income received would reflect the repayment (that is the important part) and the taxes withheld would still show the same as they were already paid. Then when you file, the tax software would automatically show your refund for the huge overpayment.

Whiskey4
05-04-2018, 03:54 PM
Anyone have any experience with this or know any way around paying back money I didn't get?

The problem is that the company still spent the money even if the IRS receives it instead of your bank account. As the departing pilot is leaving mid-contract, he or she is fully responsible to fulfill the terms and make the company whole.

calmwinds
05-07-2018, 02:03 AM
I know for 2017 you should be able to itemize the deduction. But for 2018 and forward, I don't think you can, unless you can still beat the new (higher) standard deduction. But also keep in mind, you can't deduct as many things under the new plan, that you could before. But as someone wlse already said, this is a unique situation, so you may need to consult a tax attorney.

Talk to a CPA. A tax attorney is overkill. If you received the payment in one year and repay it in the next, the rules changed with the new tax law. You need to talk with someone who knows what to do. More than likely, as I have seen with the tax law, you are screwed.

pitchattitude
05-07-2018, 08:54 AM
Talk to a CPA. A tax attorney is overkill. If you received the payment in one year and repay it in the next, the rules changed with the new tax law. You need to talk with someone who knows what to do. More than likely, as I have seen with the tax law, you are screwed.

While I agree you should talk to a CPA, you should receive a corrected w2. As long as you have as much earnings as you have to pay back and don’t have a negative number it should be fairly straight forward. The big issue is SSI as there is no normal mechanism that you would file for a refund. The company has to refund that to you (or in this case get it back from the govt for you). I have had that done and when I entered info into TurboTax based on an estimate, it flagged the SSI amount and said to contact the employer for correction.

bamike
05-07-2018, 10:09 AM
So I took the bonus at Envoy but ended up having to leave (family reasons) after 2 weeks. Here's the issue, I netted $11.5K of the $17.1 K bonus (taxes.) Well they want me to pay back $17.1K and say I'll get the rest back from the Govt next year. Anyone have any experience with this or know any way around paying back money I didn't get?

Many employers make you sign an agreement to pay back the gross amount, I don't know about Envoy. If you signed this then technically they can ask you to pay back gross even though it results in a tax loss to you. Assuming you didn't sign that:

See the links below for the correct way to handle this:
https://www.dickinsonlaw.com/blogs-articles/2016/08/19/employee-repayment-of-compensation

Another source from Thomson Reuters Tax:
https://tax.thomsonreuters.com/blog/cs-professional-suite/cs-payroll-solutions/overpayments-and-repayments/

Publication 15 with the IRS (wage repayments):
https://www.irs.gov/publications/p15#en_US_2018_publink1000202537

Unfortunately, most employers are too lazy/incompetent to correctly address this situation, and scare the employee into paying back the gross amount of the bonus, instead of the net amount, thereby screwing them out of social security and medicare taxes as a minimum.

If they do it correctly, the impact on the employee should net to zero.



Search Engine Optimization by vBSEO 3.6.1