Should I file a W-2 if there was no withholding from my employer?

by Harold P. Eck, CPA | Feb 12, 2019

Should I file my W-2 if there was no withholding? My employer states that my income is too low for any withholding to be taken out. On the other hand, my second job takes out federal withholding, but when I go to enter my tax information online my refund decreases. Last year I did not file the same W-2 that had no withholding and ended up having to send the IRS a bunch of information. In the end, the IRS sent me a nice-sized refund. Everything is the same as last year so why does my refund keep downsizing? I check my refund transcript and the W-2 with no withholding is not even on there.

You should report all income received during 2018, including all W-2 income, regardless of whether there was withholding.

The IRS has a W-2 record of the income, and will expect it to appear on your Form 1040 tax return.

When you create an online return that includes only your second job income and withholding, the software will compute the refund based on the second job income only. When you add the first job income to your online return without any corresponding withholding, the online tax software re-computes the total income and income tax. Adding the first job income to the online return increases your total taxable income, and your income tax. Since there was no tax withheld on the W-2 income you added, your refund will go down.

If you want a larger refund, you should have tax withheld from your first job income.
You should be able to complete a new W-4 form for your employer(s) to increase the total tax withheld.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Harold P. Eck, CPA, is an individual practitioner in Jersey Shore, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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