W-2 Goof

2006-03-01 by

Hi! It’s TaxQuips time from TaxMama.com.

Today TaxMama hears from Glenn in NY who tells us, “I have a question about W-2s and how they are compiled. I ask because there is a discrepancy between my year-end payroll stub and my W-2. The total on my W-2 was roughly $10,000 higher than on my yearly pay stub. This is despite the fact that I donated the maximum amount to my 401k (pre-tax) and was reimbursed for tuition (non-taxable). Can you give me some insight on this? Thanks!”

~~~~~

Uh Glenn,

That’s a very good question. Usually, just the reverse happens.

Usually, your total on your paystub is higher. Then, once the W-2 is prepared, and all the deductions for 401(k)s and tuition, etc. come out, your box 1 amounts are much lower.

Of course, the Social Security/Medicare boxes will show the higher amount.

What could make the 1 box higher than you expect?

Hmmm…did you exercise some stock options? Was there an adjustment in their retirement plan for their highly compensated employees that kicked income back into your W-2? Was there a separate bonus check you forgot about? Do they give you a car or other major equipment for personal use?

These are some of the things that would bring about a discrepancy like that.

(Yes, I know, someone is bound to bring up life insurance of over $50,000 coverage – but those premiums wouldn’t increase your wages by $10K.)

Rather than try to guess at the mystery, I have an idea. What a flash of insight!

Call your payroll department and ask them give you the details that went into your W-2.

Companies that use ADP for payroll services provide that nice reconciliation right on their W-2s.

It could simply be an error – and they will either fix it for you – or ask them for the extra $10,000…that will get their attention in a hurry. But you have the right idea.


Remember, you’ll find answers to questions about W-2s and all kinds of tax issues, free. Where? Where else? At TaxMama.com

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# | Posted in Tax Quips | Comments » (3)



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  1. Dolores Says:
    May 04th, 2006 at 09:43 pm

    I was terminated from a job that included a federal and state income tax reimbursement "incentive agreement". My employer did not want to make good on it so I went to small claims court. A few months later I recived a check from my employer's attorney in behalf of the employer, and then a 1099 Misc. from the law firm. In order to collect unemployment insurance I need the $5000. to count as income during the time I was employed. Do you know anything about this?

  2. Dolores Says:
    May 09th, 2006 at 11:11 am

    Opps, I goofed on the previous message. New Question: Would my attorney's accountant (in behalf of my ex-employer) be liable or insured for damages on this "goof". So far I've lost maximum unemployment wages of $2700.00

  3. Dolores Says:
    May 09th, 2006 at 11:19 am

    Goofing seems to be profitable. Can I write off a profession as a goof?

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