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bigtymers · Jan 28, 2007, 08:33 PM

I've recently received a 2005 W2 form from the military. On the form it said it was a correction from the 2005 W2 because I had received a W2 from the military in 2005 after I returned from my deployment. Do I file this document? Because I don't want to get in any trouble because of it. I also received unemployment when return home and I received a W2 for that also, but on the form there were no withheld taxes, what does it mean? Do I owe money or what? I really need some guidance on this one.

Thanks
Birdman Jr.

AtlantaTaxExpert · Jan 28, 2007, 09:17 PM

Birdman:

You may have to amend your 2005 return. If you have not filed a 2005 tax return, I suggest you do so.

The unemployment document is Form 1099G. They will not withhold taxes from unemployment unless you tell them to. Is it for 2005 as well?

bigtymers · Jan 28, 2007, 11:50 PM

I've already file my 2005 W2 for the military. They sent me the same form from 05' along with the 06' form. At the top of the 05' form says "CORRECTED". My Unemployment W2 is also from 05', should I still file them both?

Birdmanjr

AtlantaTaxExpert · Jan 29, 2007, 11:55 AM

Birdman:

You need to re-calculate your 2005 tax return, using the corrected W-2 instead of the previous W-2. Then compare the results.

If the second return results in a bigger tax refund, then prepare Form 1040X to amend the return, attaching a copy of the W-2 to the Form 1040X.

If you owe more taxes, you technically should amend the return as well, but the IRS will NOT pursue it if the additional tax owed is less than $50.

Same logic applies for the 2005 state tax return.

Now, if you did not include your 2005 unemployment compensation on your original return, then you must file an amended return to add the unemployment compensation and the corrected W-2. The fact that no money was withheld from the unemployment compensation means that you will owe additional taxes, plus interest (which cannot be waived).

If you wait for the IRS to catch up with you, some rather heavy penalties will be added to the additional tax you owe. If you com forward, the IRS will likely waive the penalties.