2/13/13

Most BBs offer $10,000 for signing/relocation. In NYC, taxes take about 50%, leaving you with around $5,000 cash. When it comes time for taxes, about how much of that much is returned to you?

Comments (14)

2/12/13

not much...and it just counts as compensation, so it's not treated in any special way. When I was a first year analyst at GS, all said and done, I think I got back around $2000 in April of the first year of my being at work. Obv everyone's situation is different, but that seemed to be a good average.

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2/12/13

Wow thats really sad that they do not. I know when my bank gave me my signing bonus, they paid taxes on my behalf. So when they told me what the bonus was, thats was the final number post-tax. I assumed most banks did it this way, I guess I was mistaken then.

2/12/13

I have a question along these lines maybe one of you guys can answer... I am a first year in Chicago, but I had training in NY for my BB so I paid taxes there this summer. I started to file my return last night, but NY is saying I owe taxes for all of the money I have made since moving back to Chicago even though I paid taxes in Illinois for it. This can't be right can it? Can I really owe NY over a grand in taxes for the money I earned in Chicago and paid full taxes on already?

I would agree with you, but then we'd both be wrong.

In reply to TeddyTheBear
2/12/13

TeddyTheBear:
Wow thats really sad that they do not. I know when my bank gave me my signing bonus, they paid taxes on my behalf. So when they told me what the bonus was, thats was the final number post-tax. I assumed most banks did it this way, I guess I was mistaken then.

Sounds like a loophole that works in their favor.
2/12/13

Double-check me on this, but if you are a recent graduate and were in school at least 5 months of the year (graduated in May), you still qualify as a full time student which helps beef up the return a bit.

2/13/13

You can just turn up your allowances if you feel like. When my annual bonus gets ripped to shreds by taxes, and I know i'll get lot of it back, I just move my paycheck allowances to 3 and collect a higher paycheck through the year.

In reply to rogersterling59
2/13/13

rogersterling59:
I have a question along these lines maybe one of you guys can answer... I am a first year in Chicago, but I had training in NY for my BB so I paid taxes there this summer. I started to file my return last night, but NY is saying I owe taxes for all of the money I have made since moving back to Chicago even though I paid taxes in Illinois for it. This can't be right can it? Can I really owe NY over a grand in taxes for the money I earned in Chicago and paid full taxes on already?

No. You'll have two state returns (one for each time period) and one federal return. Now getting those bureaucratic a-holes in NY to understand your situation may require jumping through some hoops, but you definitely don't owe NY taxes for time you worked in IL.

2/13/13

Under proposed Obama executive orders, you will owe the government another $10,000.

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In reply to TeddyTheBear
2/13/13

TeddyTheBear:
Wow thats really sad that they do not. I know when my bank gave me my signing bonus, they paid taxes on my behalf. So when they told me what the bonus was, thats was the final number post-tax. I assumed most banks did it this way, I guess I was mistaken then.

this was how i got my signing bonus as well, 10k on the dot after taxes

2/13/13

YES, you get a majority back via tax return, almost all of it actually.
No matter what your income is the bonus is initially charged ~25%, as supplemental income

However, when you start your first year in June and by the time you file your tax return you would of only worked half a year. The IRS is taxing your bi-weekly salary with the assumption that you will be making 70k a year (higher bracket). However since you only worked half a year you only end up making ~35k (assuming a 70k base) + 10k= 45k for the year. This puts you in a very low tax bracket... lets say that tax bracket pays 10% for the year (assumes straight 1040EZ, no itemization/deduction, etc)... thats the difference you make up and why you get a much higher return

In reply to theworks9
2/13/13

theworks9:
However since you only worked half a year you only end up making ~35k (assuming a 70k base) + 10k= 45k for the year. This puts you in a very low tax bracket... lets say that tax bracket pays 10% for the year

Will this be affected by year end bonus though? Or is that counted separately?

2/13/13

The above pretty much nailed it all. You usually get some back, depends on what you file as.

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2/13/13

Theworks is pretty much spot on.

The thing that you guys need to realize is that net-net bonuses aren't taxed any different than regular income. There is a large amount of withholding when you get the bonus, but at the end of the year it's regular income taxed at your normal tax rate. There is no section on your taxes to get part of your bonus back.

At the end of the year if you look at a ridiculously simplified example it basically works out to (income * tax rate) - taxes paid. In that simple equation income and taxes paid are treated the same whether they came from salary or bonus.

Roger, you need to file a multi state return. Not meaning to be offensive, but given your question you could probably use a little help. I use a guy in the suburbs who's really affordable, but I know a few in the city as well. PM me if you want a reference.

2/13/13

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