Vacation pay

Forum|Forum|2 years ago
March 14, 2024
2 replies
11 views

2 part question: I retired 2022 December

therefore did not work 2023. I received money for accumulated vacation backpay

in early 2023 and accompanying W2 form. Do I enter as normal income or some other option available that might be lower tax rate? And although I did not work my MAGI is over $135k for some reason therefore unable to take advantage of contributing IRA as tax deduction. Why my magi so high when I did not work?

Bsch4477

Level 15

Enter the W-2 as you would normally. We can’t see your return but you must have income to account for your MAGI.

DavidD66

Level 15

You report your W-2 for the vacation back pay the same way you would report a W-2 received while you were still working. The vacation pay is considered earned income just like your earnings while you were working. There is no lower tax rate option. If the amount in box 1 of your W-2 plus investment income and retirement income (taxable social security, pensions, etc.) is over $135,000 then your MAGI would be that high. Even though you did not work, you still have earned income from the vacation pay.

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bob667Author

Level 2

Vacation pay I collected in 2023 about $14k. No dollar from work as I was retired entire 2023. Yet my My magi is well over $150k which is amount I never earned that high in my life. Where do I get the calculation and the breakdown in TT?

Vanessa A

Level 15

Sounds like there may be a typo. Go back and double check your decimal points any forms you entered, especially the W-2 with the $14k. Be sure you didn't enter that as $140K instead of $14k.

If you are using TurboTax desktop you can also go to forms mode, then click on your 1040 form, then right click and select data source. This will tell you where the numbers are coming from.

If you are using the online version, you can see your 1040 form, but you can not data source the information.

On the menu bar on the left that shows.