incorrect w-2

[elyoungnc]

Sorry if this is a duplicate post - I find the community forum difficult to navigate!

I have received an incorrect W-2 for 2024 from a former employer with a large credit amount in Other Pretax/Wage Limit - this results in Box1 being 50% lower than what it should be.

In June 2024 I requested payroll to stop federal withholding (because I take the Foreign Earned Income Exclusion) which they did; I had done the same thing in July 2023 and the W-2 for 2023 was correct with nothing in the Other Pretax/Wage Limit section. TurboTax calculates the correct federal tax due when I completed the FEIE section. 

I have asked the former employer (now acquired by a different company) for a corrected W-2; they contacted Dayforce (the payroll software provider) to confirm the W-2 is correct -- Dayforce confirmed the W-2 is corrected "based on the employee's withholdings".  If I use the W-2 provided I will get a large refund; if I use the numbers on my last paystub for 2024 I owe a large amount; I want to file my taxes correctly but I don't know how to do that - use the W-2 provided or try to figure out the correct numbers from my last paycheck?

[BillM223]

The issue is that the payroll provider gives a copy of your W-2 (whatever it is) to the IRS, so if you make changes to the W-2 when you file your return, the IRS is highly likely to notice this, hold up any refund, and send you a letter demanding an explanation.

So it would probably be smoother to just file the W2 that you have.

[elyoungnc]

Thank you for your response -- yes that would be the easiest path however since doing so would result in a large refund and knowing my W-2 is incorrect and that actually I need to make a substantial payment, I want to 1) file my tax return accurately and 2) not be penalized by the IRS for underpaying even though it would be the fault of my employer.

[ThomasM125]

You can enter the extra wage income in TurboTax. Go to Wages and Income, then Other Common Income, then choose Miscellaneous Income, 1099-A, 1099-C. On the next screen choose the option Other income not already reported on a Form W-2 or Form 1099:

On the next screen you can indicate that you have Other earned income, including wages not reported on a Form W-2 or Form 1099:

Keep working through that section and on the screen that says Report your wage income enter the income and choose code H for the reason code and the income will be reported as wage income on your tax return: