Resolution of Odd W-2

[Gary]

I ried to respond to my previous post, but somehow it wouldn't accept my log-in, so here are the results.

------------

The client's employer insisted that the W-2 was correct. All the employees were treated the same.

Clients wages 39000 (these are round numbers)

Box 1 has 39000

Client has pre taxed medical expenses of $4000

Box 3 and 5 show 35000

State taxable income is 35000.

Employer insists W-2 is correct.

I told the client that sometime in the future, she might hear from Social Security and Arizona.

I filed the return just as the W-2 stated, but she knows the possible consequences.

[ChEAr$]

Another twist

I thought we had had a thread about this before.

Just today I thought about it when a client's W2 had about 4,000 more in box one than
in box 3 and 5. the explanation was on the W2 form and it was for sick pay paid on top
of regular wages.

[JG EA]

They do not understand the concept of pre-tax do they? They think it means pre FICA/Med. Kind of like a reverse 401K deduction. And if the people receiving that W-2 are not counting their health insurance, or whatever as deductions because they think it is pre-tax......

[Burke]

I ried to respond to my previous post, but somehow it wouldn't accept my log-in, so here are the results.
------------
The client's employer insisted that the W-2 was correct. All the employees were treated the same.
Clients wages 39000 (these are round numbers)
Box 1 has 39000
Client has pre taxed medical expenses of $4000
Box 3 and 5 show 35000
State taxable income is 35000.
Employer insists W-2 is correct.
I told the client that sometime in the future, she might hear from Social Security and Arizona.
I filed the return just as the W-2 stated, but she knows the possible consequences.

You are correct. The W-2 is wrong. However, if the SS wages don't include this amount, they won't come calling. 941 deposits probably agree with the SS wages, and I have found that SSA does not match to Box 1 (Total Wages.) However, I would have made an adjustment on the return probably on Line 21 to deduct the pre-tax med expense for the benefit of the TP if he could not get a corrected one. I would have to look at AZ to see what the effect would be there. Do they start with AGI? Or did you show $35,000 on the state return? If so, they would not come calling either.

[Burke]

I thought we had had a thread about this before.

Just today I thought about it when a client's W2 had about 4,000 more in box one than
in box 3 and 5. the explanation was on the W2 form and it was for sick pay paid on top
of regular wages.

And that is correct.