How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask emc011075 Your Own Question
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 3169
Experience:  IRS licensed Enrolled Agent and tax instructor
Type Your Tax Question Here...
emc011075 is online now
A new question is answered every 9 seconds

I just had a question regarding my taxes, I made $45K last

Customer Question

Hi my name is***** just had a question regarding my taxes
JA: Thanks. Can you give me any more details about your issue?
Customer: I made $45K last year, but when I left my company I had to pay back $20K in termination fee back to my employer As a result I took out a loan, which requires me to back back $609 a month for 36 months and essentially I made $25K last year, considering the amount I paid back to my ex-employer I was wondering how I should file my taxes in this case
JA: OK got it. Last thing — Tax Professionals generally expect a deposit of about $32 to help with your type of question (you only pay if satisfied). Now I'm going to take you to a page to place a secure deposit with JustAnswer. Don't worry, this chat is saved. After that, we will finish helping you.
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.

Hi. My name is ***** ***** I will be happy to help out.

When did you repaid it back to your employer? in 2015 or 2016?

Customer: replied 1 year ago.
Hi, thank you for responding back to my question.
I paid the termination fee in October 2015 when I left the company.
Expert:  emc011075 replied 1 year ago.

If you repaid it last year than you should request a corrected W2. If the employer will not issue you a corrected W2, you can claim the repayment as a deduction or a credit on Schedule A. You will have to figure it out both ways to see which one will give you better refund or lower balance.

Expert:  emc011075 replied 1 year ago.

Here are instructions how to do it:

Expert:  emc011075 replied 1 year ago.

Regarding the loan, you cannot deduct the payments and because it is personal, you cannot deduct the interest either.

Customer: replied 1 year ago.
But is a contract termination fee considered a repayment deduction?
Expert:  emc011075 replied 1 year ago.

You received W2, correct? What it said in your contract?

Expert:  emc011075 replied 1 year ago.

Employer is required to pay you for your time or work done. If you received advances (or higher pay) as a condition that you must stay with your employer for a certain period of time and your employment is terminated early, your termination fee is basically repayment of those advances.

Expert:  emc011075 replied 1 year ago.

Any questions? Is there anything else I can help you with today?

And if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. You find the rating bar on the top of the page – 5 stars. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.