Weird W-2

Today TaxMama hears from Tom in Maryland, who is a tad befuddled. “what to do with a W-2 that includes income in Box 1…but there’s no reported SS wages, state income, or withholding of any kind. There’s a notation on the W-2 that reads, “Income subject to self-employment tax and must be reported on Schedule SE”. The “employer” is an international organization. It appears that, though a W-2 was issued, we’re looking at a self-employed for tax purposes.”

Hi Tom,

Aaaaah….IRS’s efforts with respect to embassies and international organizations are having an effect. So, that’s what the employers are doing – issuing weird W-2s.

OK, if your software isn’t set up to accommodate it, here’s the best you can do. Enter it as a W-2, because IRS’s computers will be looking to match that line.

Then, go to the Schedule SE and enter other the income manually. Include a disclosure statement or explanation about the nature of the W-2.
http://www.accountingweb.com/cgi-bin/item.cgi?id=104856&d=892&h=884&f=882&dateformat=%o%20%B%20%Y

If your software provides a way to enter other income into the Schedule SE without an override, you’ll still be able to file electronically. Consider filing electronically using Form 8453, in case you feel the need to send paper back-up for the return.

For 2008, you will need Estimate Vouchers to cover the federal and state taxes – and the self-employment taxes.

Perhaps you are a good candidate for a personal EFTPS (Electronic Federal Tax Payment System) account. Set it up – www.eftps.com so your payments can be automatically sent to IRS on time.

And remember, you can find answers to all kinds of questions about consular W-2s and other tax issues, free. Where? Where else? At TaxMama.com

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