Corrected W-2

[MsTabbyKats]

Spouse had to repay about $11,000 to employer for 2014 in 2015.

Corrected W-2 only shows changes for FICA taxes.

(There was no overpayment of fica on original return).

So....I don't do anything now.  Then for 2015 I use the repayment as a Schedule A deduction (which really isn't fair)....unless the repayment is reflected on her 2015 W-2.

I'm just thinking out loud....and looking for confirmation (that I don't change the income....since it isn't reflected on the W-2C).

Thank you..........

[SaraEA]

The repayment will be reported in 2015.  Since it is over $3k it can be taken as either a Misc Sch A deduction (not subject to 2%) or a Section 1341 Claim of Right.  Here you recalculate the taxes for the previous year without the income that was later repaid, compare it to the current year's tax (without the deduction), and take a tax credit for the difference.  See Pub 525.

I had a client who had to repay so much leave time (employer kept paying her when paid leave ran out) that they had her repay it over 3 years.  In two of those years the Claim of Right worked out better for them and they took the credit, the other year the Sch A deduction resulted in less tax.

[MsTabbyKats]

Thanks.....

The FICA taxes are being reimbursed directly from the employer....but they keep insisting the employer told them to amend the return now,

i told him if he wants to waste his money and my time...I'll gladly do it.  But first I want to speak to the employer....just in case he will re-issue a W-2 C showing "wages".

 

 

 

 

[Medlin Software, Dennis]

"employer told them".  Another indicator of employment insecurity for the employees, and full employment for those cleaning up the mess.  I hear this type of thing daily, an employer is getting involved with an employees tax situation.  "I want to make sure the employee does not owe at the end of year" is a good example.  I sometimes try to suggest it is none of the employer's business and that offering tax advice can get them in liability, but I usually get rebuffed.

As an aside, did you backup your data today?  First call of the morning was from someone asking if I have a copy of their data as their computer went BSOD (blue screen of death).  Folks, you can never backup enough since your income depends on it, and just as importantly, TEST your recovery process at least once a year.  Backing up without testing is barely better than no backup at all.

[Cathy]

Medlin,

Does your company have any plans in the future for tax software (hopefully)?

 

[Medlin Software, Dennis]

Ii do not see that in our future...

[Jack from Ohio]

Medlin,

Does your company have any plans in the future for tax software (hopefully)?

 

Ii do not see that in our future...

A wise choice for you!!  Stick with what you do best that is working.

[Medlin Software, Dennis]

Indeed.  We do think and plan for our future and for succession, but there is no reason to fail by trying to do more.