I signed an offer letter in California that included a $12,000 sign on bonus. If I leave before 1 year, I will owe the full $12,000.

I paid about $5,200 in taxes on the sign-on bonus. These taxes were taken out of my first paycheck with the company. It has been eight months, and I feel that it is time for me to leave the company.

Because this is in the same tax year, will I get back the full $5,200 from both Federal and State? It's almost like this transaction has not even occurred, as this amount will be paid back in full to my company (by me), and it will ultimately reduce my income for this tax year.

If you leave the company, make sure that they adjust your annual income to show the $12K reduction.

That will probably result in a large tax refund from both the IRS and California, but the COMPANY will not give you the taxes back, as they have already been sent to the IRS and state.