Retired GM employee receives w-2 for lawyer fees. I think all do, and I've always taxed the uncollected on line 63. Got a new client, they brought in last years' return, and that preparer didn't put it on at all. How does anyone else handle this? It's a minnimal amount, but I still want to do it right.
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You are doing it correctly. The only time I don't report it is if they don't have to file except for that amount. Right or wrong i am not going to make them file for $6 worth os ss tax. -
That's where I an at now. They only owe $6, and not liable for any other tax or any other reason to file. Will lose a new customer, but I won't take advantage of them. Will IRS or SS administration let this go? Don't want them to come back in later years with any type of penalties or interest.Comment
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I would leave it up to them. I have never heard anything back over the years. Our government is in the process of giving back money to citizens who don't even pay tax (the proposed rebates) so it would seem kind of foolish for IRS to go after six bucks. As you stated in your first post the preparer the year before didn't show it. Probably half of the preparers out there wouldn't know how to report it.(No one on this board of course)Comment
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Value Received
Not a tax issue, but have you ever asked any of these GM folks what happens when they try to use these legal services that they have to pay tax on?
What a rip-off. The Union and GM have negotiated this "legal fund" into their labor contract. They say this is "for the benefit of their employees."
I have a few people who have tried to use this. They are either ineligible, make too much money, or have the legal services hundred of miles out of driving distance. And the case itself may not qualify.
I have not had a single client be able to use the service, and they don't even know anyone who has. Not worth the lousy trifling amount of tax they have to pay. I believe the Union, GM, and a few lawyers laugh all the way to the bank. Very much like class-action stuff.Comment
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I would not know what to do
with this W-2. Could anyone tell me where to see a facsimile of one of these W2s and learn the tax treatment? I think I am hearing that the money involved is subject to income tax and social security tax. My first thought would be to enter it as written on my W-2 Screen but if that yielded diagnostics I could not or could not bring myself to override, I would be partially lost. I believe that my software would let me manually enter the amount on line one of 1040 but I would have no idea how to tax it for only the employee's portion of Social Security and Medicare. I don't think I have ever done a return for a GM retiree - we don't get many in NC. Also does anyone know if a Ford Retiree would have the same issue?Comment
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Husband Gets GM Legal W2's
My hubby gets those W2's has for years as he retired from GM as well..I always report it on our tax returns....And yes we have used the legal services for few matters over the years...Works well for us...Comment
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Legal fees
Overall, my clients gripe and complain about having to pay the tax on it. Ford also has the same thing. A few of my clients have used it and are happy with it. One client told me they complained about the distance from their home to the legal dept, so they got to use a local attorney under the legal plan.
Most of my people won't ever use the legal services. I do have quite a few people with this type W-2.
One even told me the CEO's son-in-law needed a job as an attorney after graduating form law school so the CEO started the service. I don't know if this was a Ford or GM employee.
dmj4Comment
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