I received an IRS notice noting that the 2019 tax withheld reported from my employer is different than the 2019 tax withheld reported on my tax return. Need CPA!

[danhilde]

I have been using TurboTax for decades.  I always import my W2.  For the life of me, I can't figure out what went wrong.  I attempted to amend my 2019 tax return here in TurboTax but I'm afraid to mail it.  I'd like for a CPA to review to make sure I'm doing the right thing.  I'm in Phoenix, Arizona if I can't find this support here on line in TurbTax.  Dan Hildebrand

[ThomasM125]

You would have to use the Help option on your TurboTax screen to contact a support professional, but it seems your issue could be easily investigated.

The federal tax withheld as listed on your tax return is on form 1040, line 25(a). That amount should agree with the amount listed on your form(s) W-2, in box 2. If you find that those numbers don't agree by the amount that the IRS says you owe, then all you need to do is pay in the tax due, you don't need to amend your tax return.

[SweetieJean]

Either the amounts agree or not, or perhaps the employer failed to send the actual money to the IRS.  Have you checked with that employer?

[VolvoGirl]

For 2019 the tax withheld is on line 17.  Does it match your federal withholding from W2 box 2 and any 1099 you got?   Yes you have to double check the amounts that were imported.  They may not import right.  

[danhilde]

First, Thomas, thank you.  I see Box 2 on my W2 of course.  But I don't have a line 25(a) on my 1040.  The last line number on my 2019 1040 is line 24.  Can you confirm the line please? 

Also, the IRS did not say in its notice to me that I owe; it only says that it "received information from third parties such as employers or financial institutions that doesn't match the information I reported on my 2019 Form 1040.  Then in the detail section on the back of the letter, it says that the difference is 'Tax Withheld'; that my employer reported a certain dollar amount withheld.  I checked my 2019 W2 and the number that the IRS noted is the same.  Therein lies the mystery because I import my W2 in TurboTax. 

So I do want to have a CPA look at this but, if you would ... please reconfirm the line on the 1040 that needs to match my W2 Box 2 as this will be very helpful to me!

Dan  

[danhilde]

Thank you Jean.  I checked with my employer and they said that they did not send a correct W2 in 2019 for me.  Since I import my W2 directly in TurboTax, this is the mystery.  I asked another expert on this thread to confirm the line number on my 1040 that must match Box 2 in my W2 as this may lead me on the right path to figuring this out.

[danhilde]

Thank you VolvoGirl.  Box 2 on my W2 is $30534.72.  Line 17 on my 1040 is $33809.  So this may be the difference that raised the flag!  But I do not 'enter' these numbers in TurboTax ... my information is imported whether from employer (W2) or from eTrade (e.g. RSU, ESPP) so I'd have no idea how to resolve this.  But thank you as I'm seeing the difference now.

Do you know whether I can get CPA support in TurboTax to help me through this?  Must I find a CPA here in the Phoenix, Arizona area for help?  I attempted the amend in TurboTax for federal and state and have a PDF but it's not clear to me whether this will resolve the issue since the before/after W2 Box number is the same in the amended return (?)

[Critter-3]

ALL information imported  MUST be checked by the user for accuracy so if the wrong amount was imported and you did not catch the error  but the IRS did and your W-2 form agrees with the IRS notice then there is nothing to be done.  The error was made and the IRS corrected it ... there is nothing to discuss with anyone at TT.  Imported figures are not covered by the accuracy guarantee.  

[danhilde]

Critter, I'm not pointing fingers here.  I'm simply trying to figure out what I have to do in order to get through the process to satisfy what the IRS needs.  I did attempt an amend using TT.  In the 1040X, line 16 has 0, line 18 has 3,387, and line 19 has -3,387.  There are no other data in the 1040X.  So what I'm trying to understand is 1. Is the 1040X correct.  2. What other paperwork must I send with the 1040X to the IRS.  Do I need to do anything in terms of amending my state tax for 2019 as well.  I'm an expert at something things but not at tax preparation so I'm simply trying to get the support I need to put this interesting (but scary) situation behind me.  Thanks for your clarification on the accuracy guarantee.  Dan  

[VolvoGirl]

You don't have to do the amended return since the IRS caught the error and adjusted it for you.  Or did the IRS say to amend? If the IRS is right just pay the tax due and go on with your life.

[danhilde]

Yes, I'm sure I should amend.  In the notice (front/back page), there is verbiage like:

- You may need to file an amended 2019 Form 1040X (main title on page 1).

- What you need to do immediately section includes ... If you agree with the information reported by other sources - Complete an Amended U.S. Income Tax Return (Form 1040X) ... Send your completed 1040X ... etc.

- Next Steps section - Either file an amended return or ask your employer or other financial institution to correct their records.

*** Same Next Steps section - If you don't file an amended tax return or request that your records are corrected, your records will continue to contain incorrect data, and we may impose penalties.  You may also continue to have similar reporting problems.

So I do believe I have to amend.  I may owe the IRS since I received $3,387 fed refund in 2019 when my 1040 line 17 was $33,808 but my W2 box 2 was $30,534.  The IRS notice/letter says that my employer reported $30,534 and I have confirmed that is true looking at the 2019 employer W2.

[SweetieJean]

Line 17 also include Additional Medicare Tax withheld. The amount shown on Form 8959, line 24, is included in the total on line 17.  Could that account for the difference?

[danhilde]

Jean, I don't have a Form 8959 in my 2019 1040 'package' (generated by TT) but there are references to it:

For example, while I don't have a reference for Form 8959 line 24, I do see the following in my SMART WORKSHEET FOR: Child Tax Cr and Cr for Other Depend Wks: 

E Enter the Additional Medicare Tax withheld (Form 8959 line 22) ... and this line has 0 (zero) entered.

Dan

P.S.  And I tried to track down the difference as well ... because line 17 in the 1040 says "Federal income tax withheld from Forms W-2 and 1099" and this has the value 33,808 (instead of the W2 value of 30,534).  So I thought perhaps some 1099 had a value of (33,808 - 30,534 😃 3274.  But when I search my 2019 1040 (generated by TT) for 3273, 3274, or 3275, I get no hits.

I definitely see why you guys become tax experts.  Fun ... but not when you get the IRS notice.  Sheesh.

[DawnC · Accepted solution]

In your 2019 tax packet, do you have your Tax Payments worksheet?    It is possible that you may have type a number into the withholding boxes on one of your 1099s.    This worksheet gives the detail of Line 17 (2019 returns).

[danhilde]

Dawn, you have us very close now.  I hope you can see the three attachments:

- The first is my 2019 Tax Payments Worksheet.  Line 10 (Form W-2) has the 30,535 which is the correct W2 amount (including what the IRS sees as correct for Line 17 on the 1040.  The Tax Payments Worksheet *also* has the 'missing' 3273 (on Line 17) and this is assigned to a Form 1099-B (State AZ). 

- The second two (2019 1099-B 1 of 2 and 2 of 2) are my Form 1099-B Worksheet and this shows where the 3273 is coming from.  It seems to be an ESPP transaction I'm thinking.  Notice Total Federal Backup Withholding if 3273,

Dawn, does this shed light on what I need to do to provide the IRS what they need?  I can't tell you how much I appreciate all the amazing help that I'm getting from *all* of you on this!

Dan