Can I have my sign on bonus given for 2006 tax year even though I started working January 8th, 2007?

I don't like how my $5000 sign on bonus reads: 10% simple interest if I do not stay 3 years, payable upon termination, and that if they took me to court I may have to pay their court costs. I was not given relocation expenses. The person that hired me and my recruiter say that hospitals don't usually ask for the money back. Should I sign or how should I ask the terms to be changed?

If I take the $5000 sign on bonus tax wise what is the best thing to do with it?
1. Pay off my $5000 student loan?
2. Put it in a 401(b) or other investment?
3. Have it given for 2006 tax year since my income was $0?
4. Have a percentage of it paid per year or per month?

You will pay taxes on the bonus in 2007. You CANNOT push it back to 2006.

If you take the bonus, take it all at once. About 30% will be withheld for taxes.

Personally, I would invest it.