Common errors on your W2 (Salary year-end reporting)/1099s and how to fix them
By the end of January, many of you will receive copies of 1099s and W2s. If all the information is correct, you are all set for the tax filing. However, if you notice any errors there is no need to panic. Many of the errors you find on your W2 may be fixed if found timely. Below is a quick list of common scenarios for employees and general information for employers. We hope you find this useful, this is a collection of most frequently asked questions and common scenarios :
FOR EMPLOYEES
1.W2 has incorrect social security number, name and personal information. How can I get this corrected? Whom should I call?
Our response: Report to your payroll department so a corrected W2 form may be issued before the tax filing deadline.
2. I worked in multiple states but not all states are reflecting on the W2.
Our response: Same as above. Ensure you communicate with your payroll department as there are state-specific rules. There should be taxes withheld in multiple states depending on the duration of your state on a project & various other nexus rules.
If there are no taxes or lesser taxes withheld from the state, you may be subject to fines and penalties for underpayment of taxes.
3. There is excess tax withheld from W2 and as a result, I am paying excess tax & receiving a higher refund. What can I do this year to fix this?
Our response: Yes, if the big refund was a result of excess W2 withholding from your paycheck or if your marital status or dependents have changed- it may be best to revise your W4 form so correct tax withholding can be made.
4. I have contacted payroll administrator and my employer multiple times; I have not been issued a corrected W2. What can I do now as I am approaching the tax deadline?
Our response: In this scenario, you need to contact IRS toll-free at 800-829-1040 or visit an IRS Taxpayer Assistance Center (TAC). All TACs operate by appointment only.
Next, the following steps will follow:
- IRS will send your employer a letter to issue a corrected W2 within 10 business days.
- IRS will send you a letter with instructions and form 4852 –substitute for form W2. You are required to estimate wages earned, taxes withheld and the period you worked for that employer.
- IRS will then process your return and there may be longer wait times for refunds processing.
5. My employer is out of business, did not issue W2 but taxes were withheld.
Our response: Please follow the instructions in point # 4 above.
6. I received W2 after I filed form 4852 (substitute for W2). The amounts differ and I am anticipating higher tax refunds than previously filed. What can I do?
Our response: You will be required to file amended tax return form 1040 X.
7. I received corrected form 1099 after I filed my taxes. What can I do now?
Our response: File amended tax return form 1040 X with the corrected 1099 notifying IRS of the new amounts.
FOR EMPLOYERS
W2 corrections
- Issue corrected W2 to employees and resubmit to Social security administration. (W2 C).
W3 corrections
- Issue corrected W3 c to Social security administration which is the transmittal form for Form W-2.
- You are required for file W3-C even if there is a change in SSN or name.
940 & 941 and any other state reports corrections
- Corrected forms 941,940 will need to be refiled if you filed them already. This also applies to any state-specific reports to be filed.
For any specific questions on your tax returns, W2 or employer responsibilities- consult a tax professional who can better assist with your queries.
Sources
https://www.ssa.gov/employer/w2cinfo.htm