incorrect w-2

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.

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.

 

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: