The final pay period for my company this year is 12/28/07. We will be payed for this work on 1/4/08. Should it be on my w2? We were told our W2's would only include up to out 12/21/07 paydate (which was work through 12/14/07). That doesn't seem right...Can anyone tell me what the IRS take on this is?
2007-11-30 05:22:39 · 4 answers · asked by howetl01 2 in Business & Finance ➔ Taxes ➔ United States
Your payroll department is correct. Since you're not getting the money in your hand until 2008, it will go onto 2008's W-2. This is the way the IRS wants it for cash basis taxpayers, your company is not doing anything wrong.
2007-11-30 05:32:16 · answer #1 · answered by Knightly 2 · 3⤊ 0⤋
The money will go on your W-2 in the year it's paid, so even though it was earned in 2007, it will be on your 2008 W-2. Your company is doing things right by IRS rules.
2007-11-30 14:03:24 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Paydate always determines which W2 the wages go one. So your payroll department is correct. It does not matter what period the wages are for. I think you can find backup for this in the IRS Publication Circular E, it's on their website.
2007-11-30 15:34:59 · answer #3 · answered by Payroll Guy 3 · 0⤊ 0⤋
The w-2 reflects the actual payments received in the tax year - it is the norm. This is known as a cash basis accounting method. If you were self-employed or sub-contractor (1099-misc), you could opt for the accrual method, which means it would cover a given period of time, although you did not receive the funds in that time period.
2007-11-30 06:07:22 · answer #4 · answered by Country Boy 5 · 1⤊ 0⤋