Tax Refund on Signing Bonus

[bulldogmed]

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First year HPSP here,

Got my signing bonus at the usual time. Taxes were withheld, so I only received $14k.

My understanding is that the $2100 monthly stipend is not taxable income, so my FY2012 income is the $20k signing bonus plus whatever I made before med school started (~$3500).
Therefore, my income bracket is <$25k, and I don't pay any income taxes, aka, I get back the $6000 withheld from my signing bonus.

Am I correct or does Uncle Sam get to keep my money? Much thanks all.

 

[NavyFP]

You would be wrong on the stipend not being subject to income tax. It is.

 

[bulldogmed]

Okay, so my 2012 income would include signing bonus + 2012 stipend + misc.

For future reference, is there anyway to get "bonus" money like MSP in full as opposed to having 30% withheld?

 

[colbgw02]

For future reference, is there anyway to get "bonus" money like MSP in full as opposed to having 30% withheld?

Umm...no?

If you have a unique tax situation, then you could get a lot back. But you'll always have something withheld, even if it's only the employer's portion of your payroll taxes.

 

[pgg]

Okay, so my 2012 income would include signing bonus + 2012 stipend + misc.

For future reference, is there anyway to get "bonus" money like MSP in full as opposed to having 30% withheld?

A portion may be tax free when deployed. That portion is capped at what the senior-most enlisted member of the armed forces earns (currently $7609.50/month) plus imminent danger pay (another $225/month).

Eg, if you're deployed for a 7 month period, $54841.50 of your income that year is tax free. Some portion of ASP or ISP or MSP may be tax free.

 

[bulldogmed]

Thanks for the heads up! Appreciate it.