turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Should the company I retired from include the value of a vehicle they gave me in my w-2?

I worked 9 weeks in 2022, they gave me my last truck, Value is about $17,000. They reported it on my w-2 as regular income. This will cause all deductions to be off. is this the correct way to report this gift?
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

5 Replies
dmertz
Level 15

Should the company I retired from include the value of a vehicle they gave me in my w-2?

The reporting is correct.  It is not a gift.  It is considered to be supplemental wages like severance pay and is taxable the same as any other wages.

Should the company I retired from include the value of a vehicle they gave me in my w-2?

Does that include matching SSI payment, they did not do that and reduced withholding from fed and state taxes to cover. Thank you for the information.

dmertz
Level 15

Should the company I retired from include the value of a vehicle they gave me in my w-2?

I think you mean Social Security and Medicare taxes  (not Supplemental Security Income which has nothing to do with this).

 

The employer should have grossed up value of the vehicle and used the additional amount to cover tax withholding, including Social Security and Medicare taxes.  For example, if your federal tax withholding rate is 20 and your your state withholding rate is 5%, for the vehicle valued at $17,000 , the amount added to box 1 of your W-2 should have been $17,000 + $17,000  * (20% + 5% + 6.2% + 1.45%) = $22,550.50.  $3,400 should have been included in box 2, $1,054 in box 4, $246.50 in box 6 and $850 in box 17.

 

Or perhaps the value of the truck was considered to be less than $17,000 and $17,000 is the grossed-up amount.  In that case, the above example would have a vehicle value of $12,815.68.  $17,000 would be added to box 1, $2,563.14 to box 2, $794.57 to box 4, $185.83 to box 6 and $640.78 to box 17.

 

Whatever amounts needed to be included in boxes 2, 4, 6 and 17, the employer was responsible for sending these to the appropriate taxing authority.

Should the company I retired from include the value of a vehicle they gave me in my w-2?

You are correct, not an accountant obviously. Thanks 

dmertz
Level 15

Should the company I retired from include the value of a vehicle they gave me in my w-2?

I understand from your other posts that what they did was take some of what they withheld from your pay for federal taxes and reallocate that to Social Security and Medicare taxes.  Yeah, that seems improper because it disagrees with the federal tax withholding required based on the W-4 that you provided to them and might also be less than 22% default withholding on supplemental wages.  (Either method of calculating withholding on supplemental wages is permitted.)  This could potentially subject you to a federal tax underpayment penalty by having insufficient federal tax withholding.

Unlock tailored help options in your account.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question