You do not file an amended return
for 2007. You can take a credit in the year you repay the bonus. If the amount was more than $3,000, you may use one of two methods to take the credit.
Method 1: You may claim a deduction
on Schedule A
line 28 as a misc. deduction. Deductions
in this category are limited to those which exceed 2% of your AGI.
Method 2: Figure your tax for 2008 claiming a credit for the repaid amount. Follow these steps.
Figure your tax for 2008 without deducting the repaid amount.
Refigure your tax from the earlier year without including in income the amount you repaid in 2008.
Subtract the tax in (2) from the tax shown on your return for the earlier year. This is the credit.
Subtract the answer in (3) from the tax for 2008 figured without the deduction (Step 1).
An example of this computation can be found in IRS
Publication 525. Please refer to the following IRS publication for details - Refer to section entitled "Repayments"
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