Steps to Take If Your W-2 Form is Lost, Delayed or Incorrect

During the close of the winter months, taxpayers start checking their mailboxes with a little more anticipation. No, we're not waiting for another overstuffed Publishers Clearing House envelope. And the holiday cards have long since arrived. It's tax time, and the Form W-2 tax documents are a 'coming.

Employers have until the 1^st of February to get their W-2s out to each of their employees. Sometimes they're late, and sometimes they're incorrect. If this is the case, what can be done about it?

Late W-2s

The first step is probably the most obvious, but before calling up the IRS and complaining, contact your employer directly to ask about the non-receipt of your W-2. Perhaps they were a few days late in finalizing year end payroll, or the payroll service they are using is experiencing a delay. Many larger employers use third party services to account for payroll documents and the year end crunch can put a delay on the mailings of tax documents.

Make sure your employer has your current address as well. Your W-2 may have been returned because your address is either incorrect or incomplete.

If your employer indicates that the W-2s are going to be a few days or a week late, then just be patient. You will still get them quicker than the other alternatives.

If you've made an attempt to secure your late W-2 from your employer and still have not been successful by mid February, contact the IRS at their toll-free tax assistance number of 1-800-829-1040. The IRS will take some information from you and a record will be made that you have not received your W-2. The IRS does not lobby on your behalf; no one is going to call your employer and strong-arm them or query your employer as to why they are late.

When you call, according to the IRS web site, have the following information ready to give a Customer Service Rep:

*Your name, address, city and state, including zip code, Social Security number and phone number.
* Your employer's name, address, city and state, including zip code and phone number.
*Your dates of employment.
*An estimate of the wages you earned and the federal income tax withheld. The estimate should be based on year-to-date information from your final pay stub or earnings statement.

Keep in mind that failure to receive a W-2 is not an allowable reason to file your taxes late. The IRS still expects your return to be filed by the original due date or the legally extended due date. If you are considering filing for an automatic six month extension, use Form 4868. Remember though that a request to file late does not also grant you permission to pay late. Any tax obligation you have still needs to be estimated and paid in by April 15^th. Penalties and interest will be charged on any shortfall so better to overestimate.

If April 15^th is nearing and you still have not received anything, then you may consider filing your return using a Form 4852, Substitute for Form W-2 or Form 1099-R.

Form 4852 serves as a replacement for your W-2 or 1099-R earning statement and is generally completed by taxpayers, not the IRS. The 4852 is set up to mirror a W-2, and will ask you for your employer's information, including their Employer Identification Number, and then to enter the dollar amounts of your annual income and deductions.

You must also answer two questions regarding why you are using this form in lieu of your W-2. Line 9 asks you to explain how you determined the amounts entered; for example, did you estimate the amounts or use a year to date pay statement? Line 10 asks you to explain your efforts in trying to get your W-2 from your employer.

Form 4852 is then attached to your tax return the same way a W-2 would be.

Incorrect W-2

At times, you may receive a W-2 that has incorrect information on it. Always check your W-2 for accuracy, based on year end earning statements if possible. If there are inconsistencies or items in boxes that you do not understand, contact your employer.

Be aware of any amounts that may be reported in Box 8, Allocated Tips, Box 10, Dependent Care Benefits, or Boxes 12 and 14, used to report a variety of other items. These amounts may be taxable and may need to be rolled into your taxable income.

If you receive a duplicate W-2 in the mail, don't ignore it. This likely means that your employer sent Social Security two W-2s instead of one. (W-2s are sent to Social Security and then the IRS is copied via electronic media. 1099s go straight to the IRS because they do not impact an individual's Social Security benefits.) If this happens, at a later date the IRS may systemically assess you additional tax for unreported income. Your employer should rescind one of the duplicate W-2s.

If your employer has sent you a corrected W-2, make sure they have checked the appropriate box on the W-2 to signify it is in fact a corrected one. This will replace the previous W-2 they have submitted and won't cause a duplicate situation. If you have already filed your return, you may need to amend it.

If you've contacted your employer and they have failed to correct your W-2, then call the IRS at the same number as listed above. At that time, an IRS representative may initiate something called a W-2 complaint. A letter will be sent to your employer requesting that they correct your W-2 and provide you with a copy within 10 days. The letter reminds your employer of their responsibilities and of possible penalties that may be incurred.

If this does not work, you may again use Form 4852 as detailed above.

To Amend or Not?

Depending on the circumstances, you may choose or be forced to file your return with information that may not be accurate. If this is the case, your return will need to be amended once you have a copy of your original or corrected W-2. Amend your tax return by using Form 1040-X. Do not re-file another Form 1040.

Because the responsibility to accurately report your earnings on your tax return lies with you and not your employer, make good use of the above suggestions. If estimations are needed, be sure to pay in a little extra to avoid any potential penalties or interest.

According to the instructions on the Form 4852, "the IRS will challenge the claims of individuals who attempt to avoid or evade their federal tax liability by using Form 4852 in a manner other than as prescribed. " Make sure you are using Form 4852 for lawful purposes.