All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Pioneer
Posts: 2
Registered: ‎11-08-2017
Accepted Solution

Filing re: Over due income / Company Audit

Hi,

I worked for a company on contract, back in 2015.  Due to an audit this year, 2017, it was discovered that the company shorted several people income due to unpaid holiday pay and medical benefits.  I received a check from them today Nov 2017, that has a "to - from earned date" of 2017 year on the stub, and a "written" date almost 2 months ago... but I have not worked for the company since summer 2015.  It appears that I'm going to be held to 2017 taxes vice 2015 taxes when the money was earned.

 

A) Am I being forced to abide by 2017 tax rates?

 

B) How do I file (state & fed) for a refund based on 2015 tax law?

 

C) Are they skirting some law, paying us from 2017 accounts instead of 2015 accounts?

 

mp0000

Tax Pro
Posts: 5,727
Registered: ‎02-23-2016

Re: Filing re: Over due income / Company Audit

Hi mp0000,

 

 

Welcome to the H&R Block community.

 

Income must be reported on the tax return for the year in which you receive it, regardless of when it was earned.

 

It works the same way if you earn some extra money during the 2016 holidays but the company writes the bonus check on January 2nd, 2017, and you receive it on January 3rd, 2017.  Because you received that bonus check after December 31st it must be reported on your tax return for 2017 rather than on your return for 2016.

 

(1) Therefore, since you received this money in 2017 it must be reported on your 2017 tax return.  In fact you will probably get a Form W-2 from that company that shows the income.

 

(2) You cannot amend a 2015 tax return to include income that was received in 2017.

 

(3) More than likely the company made an honest mistake.  The company would have deducted wages they paid on their business tax return regardless of which year they paid them in so there's not really any benefit to them of paying the money in 2017 instead of 2015.  If there were a lot of people that received checks late then I might wonder if something is going on but otherwise it's unlikely that they were trying to gain something or get around a tax rule by paying it late.

 

 

If you have any other questions I'll be glad to help.

 

Louis,

Senior Tax Advisor (Tampa, FL)

Pioneer
Posts: 2
Registered: ‎11-08-2017

Re: Filing re: Over due income / Company Audit

That sounds very logical when you put it that way... which is why I thought I should check in to the HRBlock forum.

 

Thank you

Tax Pro
Posts: 5,727
Registered: ‎02-23-2016

Re: Filing re: Over due income / Company Audit

You're quite welcome.