Does IRS match w-2's to income tax return.

[gstbrandy]

Does the IRS match W-2's to the salaries & wages lines on your business income tax returns?

[OldJack]

Of course... that was the first use of the computer matching program many years ago to match W2 to the 1040. However, if they do that on a business tax return no one knows but the IRS. But, if the W2 info in the IRS computer does not match with the Social Security Administration you will get a letter requesting an explanation so I would guess that the match is made.

[gstbrandy]

not matching w-2's to 941's, matching w-2's to salaries & wages reported on (specifically) 1120S.

[OldJack]

W2 and 941 are definitely computer matched... not sure about line on the 1120S. Probably not 1120S computer matched as Wages can be in cost of good sold and other places besides line 7 and 8. On audit they are all usually matched as one of the first things done by the agent.

[ChEAr$]

on business returns,

W2's are matched only in case of audit.

[Joe Btfsplk]

Matching W-2s to Corp

Obviously they could not match if the Corp was on a fiscal year. Also, a corp might have 'accrued' wages for which the W-2 would be delayed until the next year when paid.

Nevertheless, I always try to make sure W-2s, 941s and 940s match the wages on Calendar year tax returns (unless the taxpayer has accrued wages as an expense).

Recently a clients W-2s were greater than his S-Corp wage deduction. It turned out than part of the wages were shown as employee commissions on the books.