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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121150  
Subject: How Far Back to Correct Return? Date: 12/18/2013 11:28 AM
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Here is the situation in a nutshell. I received a check and corrected W2 from the teaching hospital I worked at during residency in 1995. Yes, almost 20 years ago. Had to do with a law change/case involving work status of residents. DW received on too. Neither check amounts to much in the big scheme of things.

Is it worth the hassle of digging out the old return (if I can find them) and refiling? Or just blow things off as beyond the statute of limitations?

JLC
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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119724 of 121150
Subject: Re: How Far Back to Correct Return? Date: 12/18/2013 12:35 PM
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Here is the situation in a nutshell. I received a check and corrected W2 from the teaching hospital I worked at during residency in 1995. Yes, almost 20 years ago. Had to do with a law change/case involving work status of residents. DW received on too. Neither check amounts to much in the big scheme of things.

Is it worth the hassle of digging out the old return (if I can find them) and refiling? Or just blow things off as beyond the statute of limitations?


You don't amend the old return, the income is taxable in the year you received it, presumably 2013 since you're asking now. The corrected W-2 is for your use to confirm that the Social Security Administration corrects your earnings history for 1995 to show the additional income. This could affect your calculation of SS benefits at retirement.

Ira

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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119725 of 121150
Subject: Re: How Far Back to Correct Return? Date: 12/18/2013 1:04 PM
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Here is the situation in a nutshell. I received a check and corrected W2 from the teaching hospital I worked at during residency in 1995. Yes, almost 20 years ago. Had to do with a law change/case involving work status of residents. DW received on too. Neither check amounts to much in the big scheme of things.

Is it worth the hassle of digging out the old return (if I can find them) and refiling? Or just blow things off as beyond the statute of limitations?
========================
You don't amend the old return, the income is taxable in the year you received it, presumably 2013 since you're asking now. The corrected W-2 is for your use to confirm that the Social Security Administration corrects your earnings history for 1995 to show the additional income. This could affect your calculation of SS benefits at retirement.

Ira

========================
I'm not so sure it's additional income. Is this a situation where they have refunded you the EMPLOYEE share of Social Security tax, now ruled to be nontaxable for FICA? If so, you are recovering FICA tax that you never deducted. Take another look at the Corrected W-2. Have they changed the taxable wages for INCOME TAX (not Social Security/Medicare) purposes? (Box 1, currently.) If not, there's nothing for you to amend.

Bill

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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119726 of 121150
Subject: Re: How Far Back to Correct Return? Date: 12/18/2013 1:48 PM
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I'm not so sure it's additional income. Is this a situation where they have refunded you the EMPLOYEE share of Social Security tax, now ruled to be nontaxable for FICA? If so, you are recovering FICA tax that you never deducted. Take another look at the Corrected W-2. Have they changed the taxable wages for INCOME TAX (not Social Security/Medicare) purposes? (Box 1, currently.) If not, there's nothing for you to amend.

Good point, Bill. I hadn't considered that.

Ira

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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119727 of 121150
Subject: Re: How Far Back to Correct Return? Date: 12/19/2013 9:55 AM
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Take another look at the Corrected W-2. Have they changed the taxable wages for INCOME TAX (not Social Security/Medicare) purposes? (Box 1, currently.) If not, there's nothing for you to amend.

After further inspection, wages went from $41k DOWN to $16k. WTF? I totally don't understand that. And the FICA withholdings (IIRC) are now lower too.

Guess it will be something for my CPA to figure out.

JLC

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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119728 of 121150
Subject: Re: How Far Back to Correct Return? Date: 12/19/2013 10:23 AM
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Take another look at the Corrected W-2. Have they changed the taxable wages for INCOME TAX (not Social Security/Medicare) purposes? (Box 1, currently.) If not, there's nothing for you to amend.
====================
After further inspection, wages went from $41k DOWN to $16k. WTF? I totally don't understand that. And the FICA withholdings (IIRC) are now lower too.

Guess it will be something for my CPA to figure out.

JLC

==================
By chance, is the decrease in FICA withholding equal to the check you just received? That would be the simplest explanation.

If not, then yes, by all means, talk to your CPA, which is a good idea in any case.

Bill

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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119729 of 121150
Subject: Re: How Far Back to Correct Return? Date: 12/19/2013 2:20 PM
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By chance, is the decrease in FICA withholding equal to the check you just received?

No.

If not, then yes, by all means, talk to your CPA, which is a good idea in any case.

Fortunately (or unfortunately) my tax return is complicated enough that I use a CPA all the time. So its not like I'm hiring one just for this. So I may or may not be making a trip to the attic to find old records.

JLC

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