3 Jun, 2020

What Happens If You Receive An Incorrect W2?

What Happens if You Receive an Incorrect W2?
Written by: - Phil Baker

Do you look good in Orange? 79.9% of individuals investigated by the IRS are convicted and end up in prison. Even if the mistake wasn't their fault, they still face large legal bills and stress. If you receive an incorrect W2 you may think that it is only your employer that will be in trouble. You are wrong, there are actions you must take when you receive an incorrect form W-2.
Read on to learn what they are and how to keep yourself out of trouble with the IRS if you do receive one.

What Is A W2?

Every employer who pays their employees more than $600 in goods or trade must provide a Form W-2 for each employee. This includes relatives that work for the company. This form documents the following:

  • Income (including wages, bonuses, non-cash payments,
  • Social security and or Medicare tax that was withheld from your paychecks,
  • Income tax withheld from your paychecks.

The amount of income tax withheld from your paycheck depends on your withholdings. You can determine how much to withhold from your paycheck by reading this form.

Who Should Recieve A W2 And When?

Employers are expected to provide all employee's a completed IRS Form W-2, Wage, and Tax Statement, by January 31. If you are a contractor Freelance employee you will not receive a 1099 form. If you are an employer that is legally required to submit a W2 and don't know how we can help you understand its importance and how to create one.

What To Do If You Recieve An Incorrect W2?

Step one is to act. Even if you think the error is small, it will get noticed by the IRS. This will lead to an IRS audit and potential penalties or jail time. If you have verified that your records and your employers are different there are several steps that you need to take.

Contact Your Employer and Request A New W2

Contact your employer, immediately. Typically, you should contact Human Resources to address this question. A small difference may be due to an end of the year tax adjustment. If this is the case you don't have to do anything else. If there is a real difference, your employer can quickly issue a new W-2, also known as a W-2c, with the correct information.

Don't assume the second W2 is correct. There may be another error. We hope not, but it does happen. You have until July 15 to file your taxes but don't wait until then to start to verify you have everything you need to file a correct return. This is especially true if you are getting a refund. If you are anxiously waiting on your tax return, errors in your W2 will delay the receipt of those funds.

If Your Employer Does Not Respond, Contact The IRS

If your employer refuses to answer your questions, consistently issues the wrong W2, or flat out refuses to issue a new W2, contact the IRS. This will generate an IRS claim and protect you from prosecution. The IRS will need the following information from you

  • Name,
  • Social Security number,
  • The Income you believe is correct,
  • Contact information for your employer, more is better.
  • They will contact your employer to request a W-2c.

A word on Bankruptcy. If your employer went Bankrupt, you can contact the Bankruptcy Court for an updated W2. If you do not receive one contact the IRS and share what steps you have taken to fix the situation. The goal is to contact the IRS to have your employer issue the correct form, if they do not, you will be sent a form to complete to ensure that you can file your tax return promptly.

Fill Out Form 4852 From The IRS

This form serves as a replacement W2 so you can file your taxes. The IRS will send you this form with instructions, once you file a claim. Simply fill out the information on your form and file it along with your tax return. The information you fill out must be correct and will be verified by the IRS so carefully look over the form before sending it.
Also, the April 15 tax date still applies, so make sure you do this before taxes come due. If all this feels overwhelming, contact an accountant. They can help you walk through this process. Yes, you will pay for their services, but the money will be well worth it to minimize your headaches if you have a problem with your W2.
The IRS pays attention to taxpayers who do not do the right thing, so it's important that you resist the urge to just go with the flow and use the erroneous W-2, particularly if doing so is advantageous to you. Get to the bottom of the situation. It's a safe guess that the IRS will notice the discrepancy sooner or later, particularly if multiple employees are involved, and you don't want to be found as culpable for wrongdoing as your employer.

Want To Prevent Your Employees From Dealing With An Incorrect W2?

Our qualified team will ensure that you and your team get your form W-2 sad and sound, better yet downloadable! Not all mistakes are intentional, sometimes, small businesses do not have the resources or personal knowledge to follow the often complicated tax law. We can help out with that. If you're ready create your form W-2 today with our generator and avoid the headaches and wrong information.

If your employees need more reassurance, you might want to ensure that as an employer, you are not scamming them when it comes to giving them the payroll. As a good employer, you have to remind your employees as well to fill in the tax form before the deadline.

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