Can I deduct bonus money that I voluntarily shared with my coworkers on my taxes?

But what if OP had donated that money to an actual charity instead of giving it to coworkers? Would that have been deductible? And also, is there any way to adjust the W-2 with the employer since technically the company should have only put the amount OP actually kept on there?

If OP had donated to a qualified charitable organization instead of coworkers, then yes, that could have been deductible as a charitable contribution if they itemize deductions on Schedule A rather than taking the standard deduction. Regarding adjusting the W-2, that's not possible in this situation. The employer correctly reported the full bonus amount they paid to OP. From a tax perspective, OP received the full amount as compensation, and then chose what to do with those funds afterward. The employer has no obligation or ability to adjust the W-2 based on OP's personal decision to share the bonus with others. The income was earned by OP, paid to OP, and therefore taxable to OP.

How does taxr.ai work exactly? Is it just another tax calculator or does it actually look at your specific situation? I've tried a bunch of free calculators and they don't seem to understand nuanced situations.

I'm a bit skeptical of tax tools - can it actually handle complicated situations? Like I have rental property income plus a side business along with my regular job. Would it handle all that or just basic W-2 stuff?

It's definitely not just another calculator. You can upload documents, explain your situation, or ask specific questions, and it uses AI to analyze your particular case and provide personalized guidance. I liked that I could ask very specific questions about my situation rather than just plugging numbers into fields. For complicated situations, that's actually where it shines compared to basic calculators. It can handle multiple income streams, business deductions, investment situations, and unusual circumstances like yours with rental properties and side businesses. It helps connect different parts of your tax situation that standard tools often treat separately.

Wait how does this actually work? Does Claimyr just call repeatedly for you or what? I've been trying to reach the IRS about an amended return for literally months and keep getting disconnected.

Sorry but this sounds sketchy as hell. Why would I pay someone else to call the IRS when I can just do it myself? And how do they magically get through when millions of people can't? Sounds like they're either making false promises or doing something shady.

They use a system that navigates the IRS phone tree and waits on hold for you. When an agent finally picks up, they call your phone and connect you directly to the agent. So basically they're doing the waiting for you rather than you having to listen to hold music for hours. It's not sketchy at all - they're not accessing any of your personal information or pretending to be you. They're just waiting on hold so you don't have to. I was super skeptical too until I tried it. The reality is the IRS gets millions of calls and most people give up after being on hold for a long time. This service just handles the frustrating waiting part.

Would this create issues for the coworkers though? If the company "fixes" it by officially giving them part of the bonus instead, wouldn't they then have to pay taxes on it when they didn't before?

That's a good point about potential tax implications for the coworkers. If the company retroactively reassigns portions of the bonus to them, then yes, they would become responsible for taxes on those amounts. The best approach might be discussing it with both HR and the coworkers involved to see what everyone prefers. Some might actually want the official recognition and be willing to pay the associated taxes, while others might prefer keeping the unofficial arrangement. Either way, documenting everything clearly is important to avoid any confusion with the IRS down the road.

You're right about the gift tax exclusion, but I think OP's main concern was trying to avoid paying income tax on the portions given away, not about gift tax. Unfortunately, there's no way around paying income tax on the full amount since it was legally their income before they chose to give it away.

Oh good point, I misunderstood the original question then. Yeah, that's unfortunate but makes sense from a tax perspective - can't give away income to avoid the taxes on it. Thanks for clarifying!