Hello everyone, A potential job offer from a hospital has the following: The way they have it set up is an income guarantee. They would pay a group to hire me and the group in turn would pay my salary. The group would withhold all taxes. I would get a 1099 from the group at the end of the year. The term of commitment would be 4 years and if I left before then they would charge a penalty. What would be the tax implications of the repayment money if I had to leave before the stipulated time? Any help would be appreciated. Thank you.

Zip Code: 98240

If you report income one year, and then need to pay back a portion of that income in a subsequent year, and the amount of the repayment exceeds $3,000, you can claim a tax break either of these ways:

1. Claim as a miscellaneous itemized deduction (not subject to the 2% AGI threshold), or

2. Claim a tax credit on your current return equal to the taxes you paid in the prior year on the portion of the income that was subsequently refunded.


The IRS actually does a decent job of explaining how to report a Repayment of Income. Check out this link to the section on repayments in IRS Publication 525, Taxable and Nontaxable Income, at:

http://www.irs.gov/publications/p525/ar02.html#en_US_publink100098573.

Zip Code: 01801