Can You File One W2 and Not the Other?
Ensure accurate tax filing with multiple W-2s. Understand the importance of reporting all income and meeting IRS obligations.
The Form W-2, Wage and Tax Statement, summarizes an employee’s annual earnings and withheld taxes. Accurate and complete income reporting is essential for all taxpayers.
Understanding Your W-2 and Reporting Obligations
Employers must issue Form W-2 to each employee by January 31st annually. This form details wages, tips, and other compensation paid, along with amounts withheld for federal, state, and local income taxes, and Social Security and Medicare taxes.
Employers also send W-2 copies to the Social Security Administration (SSA), which shares this information with the Internal Revenue Service (IRS). This allows the IRS to cross-reference employer-reported income with individual tax returns. Taxpayers must report all income from all sources, including every W-2 form received.
The W-2 is essential for preparing an accurate income tax return, as its amounts directly impact tax liability or refund calculations. Information from the W-2, such as taxable wages and federal income tax withheld, is transferred to Form 1040.
Risks of Not Reporting All Income
Failing to report all income carries risks due to the IRS’s automated matching systems. These systems compare employer-reported income and withholding with what taxpayers declare on their returns. If a discrepancy is identified, such as a missing W-2, the IRS will typically send a notice, commonly a CP2000, to the taxpayer.
A CP2000 notice is not an audit, but rather an automated inquiry proposing changes to a taxpayer’s return based on the unmatched information. This notice outlines the proposed tax adjustment, which may include additional tax due, and often includes accrued interest and potential penalties. Ignoring such a notice can lead to the IRS assessing the proposed amount, along with continued interest accrual and penalties.
Financial penalties for underpayment of tax due to unreported income can be substantial. The accuracy-related penalty is 20% of the portion of the underpayment attributable to negligence or disregard of rules and regulations, or a substantial understatement of income tax. A substantial understatement generally occurs if the underpayment exceeds 10% of the tax required to be shown on the return or a fixed dollar amount, often $5,000, whichever is greater. Additionally, interest is charged on underpayments from the tax due date until the balance is fully paid, with rates adjusted quarterly, typically around 7% for individuals. In cases where intentional evasion is suspected, more severe civil penalties and even criminal charges could apply, although the IRS generally prefers to collect the owed taxes, interest, and penalties.
Addressing Missing W-2 Information
If a W-2 form is missing, the first step is to contact the employer directly to request a copy. Employers are required to send W-2s by January 31st, so allowing a reasonable amount of time for mail delivery is sensible. Many employers also provide access to digital copies through online portals.
If efforts to obtain the W-2 from the employer are unsuccessful, the next step is to contact the IRS for assistance. The IRS can reach out to the employer on the taxpayer’s behalf to request the missing form. When contacting the IRS, it is helpful to have details such as the employer’s name, address, phone number, and employer identification number (EIN), along with the dates of employment and an estimate of wages earned and taxes withheld, which can often be found on a final pay stub.
As a last resort, if the missing W-2 cannot be obtained in time to file the tax return, taxpayers can use Form 4852, Substitute for Form W-2, Wage and Tax Statement. This form allows taxpayers to estimate their wages and withheld taxes based on their records, such as pay stubs, bank statements, or other verifiable information. It is important to complete Form 4852 as accurately as possible, attaching it to the tax return. If the actual W-2 is received later and the information differs from what was reported on Form 4852, an amended return using Form 1040-X may be necessary to correct the information.