How to claim taxes on salary that is overpaid to me and repaid back?
In 2007, I was overpaid by my employer and now they want me to repay the overpayment. Today, I sent them a check for the overpayment. I have paid my 2007 federal and state taxes on the overpayment amount. How do I claim those taxes that I have paid when I file my 2008 taxes soon? Where can I indicate such a deduction on a federal 1040 tax form? Please be detailed in your answer. Thanks.
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Bummer.
If you repaid $3000 or less, it’s a schedule A 2% deduction.
If you repaid more than $3000 it’s either a schedule A deduction *or* you figure out what you paid in excess income tax and take a payment credit on the 1040. See IRS publication 525 under "repayments."
Aks the employer to give you revised W2 either showing this year or last year and based on that you can file the revised tax and get it adjusted. If the employer adjusts for year 2008 your job as well as employer’s job will be easier.