56. Error in form W2 or 1099?



Substance over form.

Have you received a W-2 or 1099 with an error?

Check forms carefully to ensure accuracy. If you discover a mistake, contact

the payer promptly to obtain a revised form. Also, a payer may issue a corrected

form on its own. Don't ignore the change on 1040 you file with the IRS. The IRS

computers match up W-2s and 1099s and could produce an unexpected tax bill.

Self-insured plans.

A little-known tax applies to employers with self-insured health plans—you must pay an annual amount based on the average number of individuals covered under the plan. The tax has increased to $2.66 per person for plan years ending after September 30, 2020, and before October 1, 2021 (up from $2.54 for the prior year). Saving grace: At least the tax is deductible.

Review plan beneficiaries.

Review the beneficiaries (primary and contingent) for your qualified retirement plans and IRAs. Regularly update any designations to reflect major changes in your life or significant events (e.g., birth, death, marriage, or divorce).

Note: These designations supersede a will.

New RDM tables.

The IRS has released new life expectancy tables to be used for calculating required minimum distributions from IRAs and qualified plans like 401 (k)s. The new tables, which were last updated in 2002, reflect longer life expectancy and will allow account holders to spread RMD's over a longer period of time. The tables take effect in 2022.


Tax Preparation, Payroll, Accounting, Tax Planning

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