Thanks all for your help. I think I'll just omit the W-2
and move on. It is hard to see what the IRS could get upset
about, but if they do, we've got documentation out the
wazoo.

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GOBLUE wrote:

- quote -

A quite workable solution of course, and I will agree in
probably 49 out of 50 cases. And in the slim case, I just
would hope that dollar would not put one in a higher tax
bracket. (grin!!)

ChEAr$,
Harlan Lunsford, EA n LA
Tue 21 Mar 2005 [at] hh

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I have had this situation several times. Claim $1 of income
on W-2 and e-file. Never had a problem.

Jim Hayden EA

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Fearless wrote:

- quote -

Ah yes, some of the quirks of the system. Just today I had
something similar, in that federal tax withheld was 51% of
taxable income, so client was precluded from efiling.

In your case, since there is zero income and no withholding
on the W2, simply ignore it.

And tell 'em I said so.

ChEAr$,
Harlan Lunsford, EA, long time ERO, ET, and TA n LA

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Fearless wrote:

- quote -

If there is no income in Box 1 and no federal or state
withholding, delete the W-2 from your prepared return and
e-file.

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Fearless wrote:

- quote -

In the past, I have just ignored the form W-2 *if* there are
not other figures on the form. There is no reason to put it
in the system if nothing is taxable. This way you can
e-file.

Missy Doyle

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Fearless wrote:

- quote -

In the past, I have just ignored the form W-2 *if* there are
not other figures on the form. There is no reason to put it
in the system if nothing is taxable. This way you can
e-file.

Missy Doyle

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Fearless wrote:

- quote -

In our office we just put $1 in box 1 and let it go. Been
doing that for about 10 years with no problem.

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Fearless wrote:

- quote -

You will have to file a paper return, as you have run up
against an obscure rule in the tax code. They want to look
at the physical copy of the W-2 form.

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I've finished preparing my 2005 federal, state, and local
taxes. Ordinarily I file both federal and state
electronically, but this year I'm prevented from filing
electronically because of a peculiar W-2 form my wife
received. She has been partially disabled since 2003 and
receiving partial disability (non-taxable 3rd party
disability payments) to supplement her lost income. In
2005, a new carrier took over for one of the three
participating carriers and during the confusion forgot to
pay my wife benefits for almost the entire 2005 year. After
a fair amount of communication involving customer service,
claims adjusters, lawyers, brokers etc, the new carrier
discovered its error and sent my wife a lump sum payment
representing all of her 2005 disability income from that
carrier. They followed in early 2006 with a W-2 form
showing NO TAXABLE income, but instead placing all of the
payment into box 12, footnote J. Not one penny of the
income is taxable, yet because they sent a W-2, we feel
obliged to list it. But when we do, we get errors saying we
can't file electronically for the feds or the state because
box 1 lists $0.00 as income.

Our returns are long and complex and filing electronically
has been our savior. Is there a way to salvage this
situation. We owe money so there isn't any incentive to
file earlier than April 17th, but I do have to decide what
to do with this rogue W-2. Claim it and mail the darn
return, or leave it out and electronically file?

Advice welcome.

Thank you.

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