Negative W-2

[Milldawg]

Has anyone on here had a W-2 that had negative number? I had a client come in today and he had a W-2 that had negative number in the boxes. (Wages, S/S, Med, Fwh and Swh)
I call the company who issued it and they said they had to void a check in 2006 that was written in 2005. Shouldn't a W-2C have been issued for 2005 and given to my client. Just wondering if anyone else had seen a negative W-2?

[JoshinNC]

I agree that a W-2c was required

Now there are 2 W-2c's required, one to fix the originally incorrect one and another to fix the one they issued this time.

[OldJack]

And it sounds like they may owe your client the taxes withheld if they have not already given it to him.

[Brad Imsdahl]

I don't think IRS computers are going to recognize negative numbers on a W-2. The computer will think they are positive numbers. This is going to be a real mess to resolve, as you can’t just ignore the W-2.

[Joe Btfsplk]

Negative W-2

Maybe the company thought his services had a negative value.

[ChEAr$]

For efliling

I don't think IRS computers are going to recognize negative numbers on a W-2. The computer will think they are positive numbers. This is going to be a real mess to resolve, as you can’t just ignore the W-2.

Certainly negative numbers won't fly. They will simply translate to a zero. That is IF
the software accepts the negatives.

So I think I would simply ignore the W2.
However if filing by paper, I would include an explanation about the negative amounts
on the W2, because this is payback, and deductible only as an itemized deductions,
if that.

[JoshinNC]

I wouldn't ignore the W-2

As has been previously stated, the client is most likely due a refund of the taxes withheld on the original W-2. I would immediately file an extension for 2006 and have the client contact the employer to get 2 corrected W-2's (one for the originally incorrect one and one for the negative one). Once all of this was done and I had the W-2c's in my hands I would than prepare the return. Ignoring this is not a good idea for a couple of reasons:

1) The client most likely due a refund

2) You will build trust with this client by helping them through what could be a complex situation without your assistance

3) You'll make more money via any representation and for filing the ammended return

Just because something is potentially difficult doesn't mean you just ignore it.

[Jiggers]

Negative W-2

I can't believe that a business would issue a negative W-2. Sounds like an incompetent bookkeeper.

If it was a tax preparer that does bookkeeping, the same comment applies.

[ChEAr$]

Okay, I'll put it this way, Josh.

As has been previously stated, the client is most likely due a refund of the taxes withheld on the original W-2. I would immediately file an extension for 2006 and have the client contact the employer to get 2 corrected W-2's (one for the originally incorrect one and one for the negative one). Once all of this was done and I had the W-2c's in my hands I would than prepare the return. Ignoring this is not a good idea for a couple of reasons:

1) The client most likely due a refund

2) You will build trust with this client by helping them through what could be a complex situation without your assistance

3) You'll make more money via any representation and for filing the ammended return

Just because something is potentially difficult doesn't mean you just ignore it.

I would ignore it for 1040 preparation and advise client to get his refund of all taxes
paid from employer, which of course is the proper avenue.

[Black Bart]

Believe it.

I can't believe that a business would issue a negative W-2. Sounds like an incompetent bookkeeper.

If it was a tax preparer that does bookkeeping, the same comment applies.

I once had a client's do-it-yourself wife (the newly-christened "bookkeeper" of his future bankrupt company) come in and ask for blank W-2 forms. I obliged and she asked how many copies employees were supposed to get. I said "three" (no city taxes around here). Client, filing his income tax in April, asked me to check her self-prepared copies to "make sure she did them right."

She had made three "red" copies for the guy and sent them all to IRS -- tripling his salary. Talk about a mess to clean up.

[S T]

Negative??

Seems to me the employer/payroll doesn't know what they are doing or are just plain lazy.

It is time consuming and a "pain" to do the W-2/941 corrections, but it does need to be done correctly. So if the employer/payroll made an error due to void check, etc, they need to correct the proper 941 quarter as well as the W-2 now.

Your T/P could have received federal or state withholding benefit, fica, mcare etc due to the "voiding" and his W-2 for the prior year was probably overstated which could affect his refund or tax amount due as well as is SSA Account.

Good Luck!

Sandy