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

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

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