In preparing the 941 for a small client with two employees I discovered that a manual checkd was cut with no withholding for FICA taxes in December. Just discovered it in Jan '07. What should be reported on the W-2, the actual amount withheld for the year or the amount that should have been withheld? If the latter, how is it reconciled and is there a provision for reporting and paying the underwithholding for the previous year?
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Hmmmm
Is this perhaps a reimbursement check or it is definitely P/R? If you gross up the check for the FICA, then you will have to either amend the 941, 940 and state unemployment returns for the quarter, or if you have not filed them yet, just gross up the amount for FICA, report that as gross wages and pay the difference on the 941. If this is a small amount, there will be no penalty for paying with the 941 mailed tomorrow
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I know this is not
technically correct but sometimes we just show pay in the next year if they are still employed with the company.Comment
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