W-2 Box 12a Code

[RLymanC]

Client received a W-2 with 750.00 coded AA (Roth IRA) in box 12a.
Box 1 Wages show 750.00 less than Box 3 social security wages.

It appears that the employer is treating this as tax deferred income.

Is there a mistake on the W-2 or in my thinking????

[Bird Legs]

Roth IRA

It appears that the W-2 is incorrect. See page 13-15, TTB.There are Roth 401(k) and
Roth 403(b) Plans. But contributions to these are also made with after tax earnings.

[RLymanC]

Box 12 Code

Thanks Bird Legs,
Everything I can find agree's with your response....will call employer Monday morning to check on the code.

[Snaggletooth]

So what's next?

Lyman, you bring up a good example of some poorly prepared W-2s we all see from time to time. Having encountered this, what is our professional responsibility?

a) File the return with the W-2 calculated as is, even though you suspect an error
b) File the return creating a $750 difference on line 7 and the amount shown as
taxable income on the W-2, even though you are not certain there is an error
c) Hold up processing the return until the client contacts his employer. (If this client
is in your office now, he is not in the mood to tolerate a delay)
d) File the option that results in the highest tax liability, then tell your client if this
proves to be wrong, you will file an amended return.

I think if many preparers respond to this, there will be some choosing each option.

Regards, Ron J.

[Brian EA]

Lyman, you bring up a good example of some poorly prepared W-2s we all see from time to time. Having encountered this, what is our professional responsibility?

a) File the return with the W-2 calculated as is, even though you suspect an error
b) File the return creating a $750 difference on line 7 and the amount shown as
taxable income on the W-2, even though you are not certain there is an error
c) Hold up processing the return until the client contacts his employer. (If this client
is in your office now, he is not in the mood to tolerate a delay)
d) File the option that results in the highest tax liability, then tell your client if this
proves to be wrong, you will file an amended return.

I think if many preparers respond to this, there will be some choosing each option.

Regards, Ron J.

I will take C or D depending on the client's mood/attitude.


thanks
brian

[RLymanC]

Goin to hold up....will contact employer....clients refund will increase by $115 due due EIC....so no problem with client.

My guess is the payroll software boobooed and was never noticed.
Employer has quite a few employees. this needs to be addressed.