Had to repay a $50k sign-on bonus - confused about filing taxes with corrected W-2

What you're dealing with is a bit tricky but definitely manageable. When you receive a corrected W-2 (W-2c) with blank boxes, it typically means those values haven't changed from your original W-2. However, for repaid income like this, the reporting can be confusing. For box 1 (wages) on your original W-2, if it included the $50k bonus, then that amount should be reduced since you repaid it. If boxes 3 and 5 (Social Security wages and Medicare wages) were already adjusted on your W-2c but box 1 wasn't, this could be because the employer is handling the repayment differently for income tax purposes. There are actually two ways to handle this: (1) The employer can reduce your wages by the repaid amount on your W-2c, or (2) You can claim a deduction for the repayment using Form 1040 Schedule A if it's over $3,000, which yours clearly is. Since your employer seems to have chosen option 2 (not reducing box 1), you'll need to claim the repayment as a deduction. In H&R Block, you should look for an option to report "repayment of previously reported income" or "claim of right" deduction on Schedule A. This is likely why your tax bill changes so significantly when you make adjustments. For state taxes, you'll likely need to follow a similar approach on your state return, but state handling of repayments can vary.

I went through almost the exact same situation last year with a repaid signing bonus (mine was $35k though). The tax forms for this are super confusing! I spent hours trying to figure it out until I used https://taxr.ai to analyze my corrected W-2 and original documents. What the tool showed me is that you need to handle this as a "claim of right" issue since you received income in one year that you had to pay back in another. The corrected W-2 not showing changes to Box 1 is actually standard procedure for many employers. They're expecting you to claim it as a deduction rather than adjusting your income directly. The taxr.ai system identified exactly where in H&R Block I needed to input the repayment (it's buried in the itemized deductions section) and showed me how the calculations would work. Saved me from what would have been a massive overpayment!

Just wanted to update everyone! I tried the taxr.ai tool that was mentioned for my wife's relocation repayment situation, and wow - it was a game changer. After uploading our documents, it identified exactly what we needed to do and showed us step-by-step where to enter the information in our tax software. The analysis explained that our situation required a "claim of right" deduction and showed us the specific line items where we needed to report the repayment. It even calculated the tax benefit we'd receive by handling it correctly - saved us over $4,000 compared to how we were about to file! What impressed me most was how it explained all the technical jargon on our W-2c in plain English. Definitely recommend it for anyone dealing with repaid income or corrected tax forms. Much easier than trying to piece together information from random Google searches.

After dealing with two corrected W-2s this year, I was spending hours on hold trying to talk to someone at the IRS about how to handle everything correctly. A friend suggested trying https://claimyr.com to get through to an actual IRS agent. You can also check out how it works here: https://youtu.be/_kiP6q8DX5c I was definitely skeptical at first (seemed too good to be true), but I was desperate after wasting entire afternoons on hold. The service actually connected me with a real IRS representative in about 20 minutes! The agent walked me through exactly how to report my repaid bonus and confirmed I needed to use Schedule A to claim the deduction rather than adjusting my W-2 income directly. Just thought I'd share since I know how frustrating it can be trying to get answers on complicated tax situations like this. Talking to an actual IRS person gave me so much more confidence that I'm filing correctly.

I need to eat crow here. After posting my skeptical comment, I decided to try Claimyr myself since I've been trying to reach the IRS about my amended return for weeks with no luck. I'm genuinely shocked - it actually worked! They got me through to an IRS agent in about 25 minutes, compared to the 3+ hours I spent on hold last week before giving up. The agent was able to look up my amended return status and give me specific information about when I should expect processing to complete. What impressed me most was how seamless the process was. I got text updates while the system was working, and when they reached an agent, my phone rang and I was connected directly. For anyone who needs to actually speak with the IRS (which for complicated situations like repaid bonuses is really helpful), this service is worth every penny. Huge time saver!

Just to add to what others have said, I've been through this before and I think there's another wrinkle to consider. If your bonus repayment and the original bonus receipt happened in different tax years, you need to be careful. In that case, you don't just adjust this year's W-2. Instead, you can either: 1. Take an itemized deduction on Schedule A (but this might be limited if you take the standard deduction) 2. Take a tax credit for the amount of tax you paid on that income in the previous year (which is often more beneficial for large repayments) This is called "Section 1341 relief" or the "claim of right doctrine." If you repaid more than $3,000, you should definitely look into this option as it might give you a better tax outcome. H&R Block software should have a way to input this, but it might be in a non-obvious location. Look for "repayment of income" or "claim of right" in their search function.

Has anyone used TurboTax for this kind of situation instead of H&R Block? I'm dealing with a similar repayment issue but I always use TurboTax and don't want to switch. Are there specific menu options I should look for?