There are two problems with amending your return twice. First, it’s difficult to do in TurboTax. Second, the IRS is so backlogged that if you filed one amended return now to report the income, and then later we are required to file another amendment, it might be six months or longer before you could even think about doing that.
Most of the time, if only boxes 3 through 6 are changed (which is your Social Security and Medicare wages and tax), it will not affect anything else on your tax return and there would be no need to do a second amendment. However, if you know that you will be receiving the W-2 see soon, then it probably makes sense to wait for it so that you can avoid the possibility of having to amend twice, even if that possibility is remote.
However, you should pay any additional tax that you owe as soon as you can, to reduce the eventual penalties and interest that you would owe if you owe additional tax.
Also note that after October 20, TurboTax online will close down for the season. If you filed your return using TurboTax online, you will need to obtain a copy of the program to install on your own computer and you will have to download your tax data file from the website and load it onto your computer so that you can work on your tax returns there. You can contact customer service to obtain a copy of the program to install on your own computer assuming that you already paid for the online version. If you already have the desktop version, you don’t have to worry about this step.
So what I would do is the following.
1. Obtain a copy of TurboTax desktop and load your original tax return file onto your computer, if you have not already done so. Make a back up copy of your tax data file to keep it in original condition for use later.
2. Make a test amended return using the original W-2. If you are due an additional refund, then you need do nothing else at this point. You will not be penalized for filing a late amendment if you are due a refund.
3. If your test amended return shows that you owe additional tax, make a payment as soon as you can at www.irs.gov/payments. Make sure to indicate when you make the payment that it is for 2019 taxes, and not 2020 estimated taxes.
4. When you received the corrected W-2, prepare and file the actual amended tax return. You will of course also need to prepare and file an amended state tax return.
5. On your 2020 tax return, you will either take the special itemized deduction or make the claim of right credit according to the instructions posted previously. To figure out the amount of the credit, you would prepare another test 2019 tax return by making a copy of your amended return that includes this employer, but subtracting the wages that you had to pay back.
6. You will have to do some research on how to make a claim of right credit on your state tax return. When you file your 2020 taxes, you will need to use the desktop program so that you can make manual entries to make the claim of right credit on both your federal and state tax returns.
7. When the employer issues the corrected W-2 that adjusts your Social Security and Medicare withholding, they may re-pay you the adjusted amount. If they do not, you can file a form 843 with the IRS to try and claim a refund of the excess Social Security and Medicare that was withheld from the repaid bonus. You will need a letter from your employer stating that they will not be making the refund themselves. Form 843 is not included in your tax return and is not supported by TurboTax. You can file it separately anytime you have the required information and you will need to download the form and the instructions from the IRS website.
