Amend tax return due specifying incorrect name on W-2

[GhostRiderXL]

Hi,

I just discovered that I specified my wife's name on one of my W-2s when filling 2020 tax return by mistake.

I tried correcting it to my name today using TurboTax 2020 just to see what is going to happen and I see that we were supposed to get a better refund if I would have done it correctly.

Now the questions are:

1. How do I correct that?

2. Does IRS charge a penalty for my mistake? If it does, then how much.

3. Do I get an extra refund that I am entitled to or it is lost?

Thanks!

[JillS56 · Accepted solution]

I am not sure why just changing the name on the W-2 would change the amount of refund on your tax return.    The return would total up the W-2s and report a total.  If none of the amounts are changed, there would be no need for an amendment.  When you say "I tried correcting it to my name today using TurboTax 2020 just to see what is going to happen and I see that we were supposed to get a better refund if I would have done it correctly."   Did  you change the numbers on the W-2?

To answer your questions:

1. To correct a return you would have to file an amended return.   However, the name change on a W-2 would not warrant an amendment.   The reason I say this is because the Amendment has three columns.   The first column is original numbers from the tax return (AGI, Deduction, Taxable Income, Tax, Payments/Credits).    The second column will show the changes made in the return.  If the AGI was adjusted it will either show a negative or positive number.   Any numbers that were changed in the return will show in this column.  The third column shows the net result of the changes and determines the end result of the amendment.
2. No, the IRS does not charge a penalty for a mistake.   However, if the result of the amendment is that you owe money to the IRS, there may be a penalty assessed.   How much, is unknown.   It all depends on how the IRS looks at it and whether the taxpayer catches it or the IRS catches it.
3. Since it is for the tax year 2020, if there is an additional refund as a result of the amended return, yes you would get the refund.   If the tax return is more than 3 years from the due date, then no you would not get the refund.  

If you decide to prepare an amended return, if there is no change in the return, to do file it.   There is no need to file it.   

[GhostRiderXL · Accepted solution]

@JillS56 thanks for your reply. There reason I came across this issue with me specifying my wife's name on my W-2 was due to trying to figure out a deduction that I received last year on the state return which was not applied on 2021 one. When I looked at the way it was calculated in TurboTax I figured that it had to do with my W-2s from last year, so I went and checked and found this issue. Then I tried changing the name to mine and TurboTax gave me completely different numbers for my Federal and State refunds.

[ThomasM125]

I think what you mean is that you entered your spouse's W-2 but told TurboTax that it was your W-2. That could affect your tax in rare instances. You can prepare an amended return to correct the matter, as @JillS56 mentioned. There will not be a penalty assessed if you are due a refund on the amended return and you will receive the refund.

You can file an amended return using TurboTax for no additional fee. You will see the option on your Home Page in TurboTax, then under Your tax returns and documents, look for an option to Amend/Change your return. You should wait until you receive your refund or the IRS has processed your return, if you sent a payment, before you amend your tax return.

[GhostRiderXL]

@ThomasM125 thank you for your reply. I will do that.