What To Do If W2 Is Wrong

What To Do If W2 Is Wrong – Every year around this time, America’s mailboxes are flooded with tax forms. Sometimes these tax forms are not published and go directly to a tax professional. In other cases, taxpayers can carefully open these forms and enter the information, field by field, into the tax preparation program. In either case, it is not uncommon for taxpayers to confuse the meaning of all the numbers, letters and other information on these forms. That will change.

This week I will break down the most basic tax forms for you. The more you know, the less dangerous some of these forms can be.

What To Do If W2 Is Wrong

What To Do If W2 Is Wrong

Form W-2 is issued by the employer to the employee. This makes sense, not just for tax reasons. There are certain reporting, withholding, and insurance requirements for employees that are slightly different than what an employer owes an independent contractor.

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The threshold for filing a W-2 is based on dollars – nothing else matters. The timing didn’t work. He is not on duty. Just Earned Dollars (or their equivalents). The magic number is $600. Every employer that pays at least $600 (or the cash equivalent, including taxable benefits) must file a W-2. If any taxes are withheld, including Social Security or Medicare, a W-2 must be provided to the employee regardless of how much was paid.

Copy A is submitted to the Social Security Administration (SSA) along with Form W-3 (Form W-3 is the total of all W-2 forms for the employer). The deadline for employers to get this information to the SSA is February 28. Copy 1 must be filed with any applicable state, city or local taxing authority. Copy D is retained by the employer.

As an employee, you will receive three copies of your W-2 form. These three copies must be submitted by January 31 of each year. Copy B is used for federal income tax reporting and is generally included with your federal income tax return (if you don’t file electronically, you must give it to the preparer, but it’s usually not sent to the IRS). Copy 2 is for use on state, city or local tax returns and for the appropriate tax authorities. Copy C is for your records (you must keep it for at least three years after sending Copy C or when it is due to be returned, whichever is later).

The left side of the form is for taxpayer information; The right side of the form is used for reporting finances and codes. Local and state tax information is listed at the bottom of the form.

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Box a. Your Social Security Number (SSN) will appear in box (a). You should always check this to make sure it is correct. If it is incorrect, you must request a new W-2 form from your employer. A mistake can slow down the refund process.

Box b. Your employer’s EIN is listed in box (b). An EIN is more or less the equivalent of your employer’s SSN.

Box c. Your employer’s address is given in box (c). This is your employer’s official address, which may or may not be where you work. Don’t let it throw you off.

What To Do If W2 Is Wrong

Box d. The control number is an internal number used by your employer or your employer’s payroll department. If your employer does not use check numbers, leave field (d) blank.

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Boxes e and f. These will appear as one large block on your W-2 form. Your full name appears in box (e). It should reflect the name on your Social Security card (SSA isn’t crazy about suffixes, so even if you use them, you shouldn’t see them on your W-2 form unless you have a Social Security card). If your name does not match the one on your Social Security card, you may need a new W-2 form; if you are not sure, ask your employer. Your address will appear in field (f) and must reflect your mailing address – it can be a PO Box – possibly without punctuation (USPS prefix). If your W-2 address is incorrect, tell your employer: You don’t need a new W-2, but your employer needs to update its records.

The boxes you are most interested in are (a), (e) and (f), the boxes circled in pink:

Box 1 lists your total taxable wages, tips, bonuses, and other compensation, as well as taxable benefits. It does not include pension plans, pre-tax benefits or payroll deductions. Since this figure (marked by the red arrow in my example below) does not include these amounts, it is not surprising that this amount is less than the amounts contained in cells 2 and 3. This is the number most taxpayers are interested in.

Box 2 shows the total amount of federal income tax withheld from your paycheck for that year. This amount (indicated by the purple arrow in my example below) is based on the elections and contributions on your W-4 form and additional withholding. If that number seems too low or too high, you may want to make an adjustment on your W-4 next year.

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Box 3 shows your total wages subject to Social Security tax. This number is calculated before payroll deductions, which means that the amount in cell 3 may be higher than the number in cell 1, as in my example. It may also be less than the amount in box 1 if you have a high wage, because the sum of boxes 3 and 7 (see below) cannot exceed the maximum Social Security wage base. In 2013, this amount was $113,700. If you have more than one job, there is also a Social Security tax audit.

Cell 4 shows the total amount of Social Security taxes withheld during the year. Unlike federal income taxes, Social Security taxes are calculated based on a flat rate. This number is 6.2%. Then the amount in cell 4 should equal 3 times 6.2%. Because you cannot have Social Security withheld that exceeds 6.2% of the maximum wage base, the amount in box 4 cannot exceed $7,049.40. In my example it is $50,000 x 0.062 or $3,100.00.

Box 5 shows wages net of Medicare taxes. Medicare taxes generally do not include any pre-tax deductions and include most taxable benefits. This, along with the fact that there is no cap on Medicare taxes, unlike Social Security wages, means that the amount in box 5 may be higher than the amount shown in box 1 or 3. In fact, it may be the largest number. your W-2 form.

What To Do If W2 Is Wrong

Box 6 shows the amount of Medicare taxes withheld for the year. Like Social Security taxes, Medicare taxes are calculated based on a flat rate. the rate is 1.45%. For most taxpayers, this means that the number in cell 6 is equal to 1.45% of the number on Schedule 5 (in my example, the green arrow is shown from 50,000 x 1.45% = $725). However, under a new law that went into effect in 2013, an employer must withhold an additional Medicare tax of 0.9% of wages paid to an individual who earns more than $200,000. Because your employer doesn’t know your entire financial situation, you may have to pay more Medicare taxes than you withhold under the new law, depending on your filing status, compensation, and self-employment income.

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See box 7 for tips for your employer. If this box is blank, it means you didn’t report the tip to your employer (this doesn’t mean you don’t have to report the tip to the IRS).

The advice in Box 8 is advice that your employer thinks is relevant to you. These tips are considered income to you.

Nothing happens in cell 9. The reporting requirement for this box expired several years ago and the box has not yet been removed from the mold (go to image).

In field 10, enter the total amount of all benefits that your employer pays for you under the assisted care program. Amounts less than $5,000 paid under a qualified plan are tax-free benefits. This figure includes reporting the value of all dependent care benefits, including benefits that exceed $5,000 (if the value exceeds $5,000, that excess is shown in boxes 1, 3, and 5).

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Box 11 is used to report amounts allocated to you from your employer’s nonqualified deferred compensation plan (this amount is taxable). This should not be confused with added amounts

12 Box W-2 Report Form Kitchen sink. Here you will see all types of codes. All income listed in box 12 is exempt from tax. Here’s a quick summary

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