Tax Law (Questions About Taxes)/repayment of wages $800

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Question
Hello.  In 2011, my company inadvertantly overpaid me by $800 when they changed from a monthly payment schedule to a bi-weekly pay schedule.  Upon my departure from the company in 2013, they made me pay back that $800 via a check.  My 2013 W2 does NOT reflect the $800 I paid them.  If I deduct this $800 as an itemized deduction on Schedule A, it is subject to the 2% rule, and I would get zero dollars back....which hardly seems fair.

Technically, I should be receiving about $200 back. Section 525 of the IRS code does not make it clear if I HAVE to use schedule A (subjet to the 2% rule), or if I can just reduce my W2 wages by $800 for 2013.  If I reduce my wages by $800, my net benifit to me is $200.  What is the correct way to do this?  Thanks.

Answer
Ken:

Have you contacted the company to determine which W-2 they will be correcting for the error.

One of the w-2's has an error.  They must correct one or the other.  Either the 2011 or the 2013.  I do not believe that you should absorb the cost of your employment by reporting the overpayment on your schedule A.

John

Tax Law (Questions About Taxes)

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John L. Tidwell

Expertise

Unemployment tax law both state and federal; determination of employer employee relationship; the usual 20 commonlaw factors for making that determination; and what makes me a liable employer.

Experience

Over 20 years of field audit experience with a state agency

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none

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Education/Credentials
Degree in Accounting from Falls Business College

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