Thanks for the insider perspective! Would this error affect how much tax I actually owe? My pay stubs do match everything else on the W-2.

If everything else on your W-2 matches your pay stubs, then the tax you owe should be calculated correctly based on your actual wages and withholding. The presence of these codes by themselves doesn't change your tax liability if there aren't any associated amounts that were factored into your income incorrectly. That said, I'd still recommend getting a corrected W-2 for your records and to prevent any potential questions from the IRS. Most tax software might flag these entries and ask you about tip income you don't actually have, which could lead to reporting errors if you're not careful.

You got lucky. My cousin ignored some codes on his W-2 that didn't make sense, and he got a letter from the IRS 6 months later questioning his return. Ended up having to provide a bunch of documentation and it was a big headache. Better to fix it upfront than deal with that stress later.

That's interesting! So if I write "EXEMPT" I won't have any federal taxes taken out of my paychecks at all? Where exactly on the W-4 would I put that? I didn't see an exempt box anywhere on the new form.

On the redesigned W-4 form, you would write "Exempt" on line 4(c) in the space where it asks for any additional amount you want withheld. Instead of putting a dollar amount, you just write the word "Exempt" there. But be careful! You can only legally claim exemption if you had NO federal income tax liability last year AND you expect to have NO federal income tax liability this year. If you made less than about $12,950 last year and expect to make less than the standard deduction amount this year, you might qualify. Since you're estimating about $18,850 in income, you would likely have some tax liability, so exemption probably isn't the right choice for you unless you have other deductions that would lower your taxable income further.

This is so important! My dad tried to help me with my W-4 and kept talking about claiming "0" or "1" allowance which isn't even on the form anymore. The new version is totally different. I ended up just using the IRS estimator tool which was actually pretty easy to use.

Thanks for this tip! Do casino loyalty cards help with tracking for tax purposes? I always use mine when I gamble.

Casino loyalty cards can definitely help as supporting evidence, especially at casinos that provide win/loss statements at year-end based on your card usage. However, these statements aren't considered complete documentation by themselves since they only track play when your card is inserted. For complete documentation, you should still maintain your own gambling diary with dates, locations, and specific session results. The IRS wants to see contemporary records created at or near the time of gambling. Your personal log combined with loyalty card statements provides much stronger documentation if you're ever audited.

Yep, happened to me too! Plus some states require state income tax that isn't withheld on the W-2G, so you might get hit with that too.

Thanks for the suggestion, but I'm pretty deep into my return on FreeTax USA already. Did TurboTax also explain how to handle the SS-8 form? And did you end up getting a determination from the IRS about your worker status?

TurboTax handled the 8919 form but like others mentioned, the SS-8 is filed separately regardless of which software you use. They do provide guidance about it though. I did eventually get a determination from the IRS, but it took almost 8 months. The good news is they ruled in my favor and determined I was an employee. My former company had to pay the employer portion of the taxes. Just be prepared for a long wait - the SS-8 process isn't quick, but filing Form 8919 with reason code G protects you in the meantime.

This is really important advice. My friend filed SS-8 and not only did it create tension, but the company actually tried to retroactively create documentation to make it look like he was properly classified as a contractor. Make sure you have copies of all relevant emails, texts, schedules, etc. BEFORE you file!

I hadn't even thought about that aspect. Thankfully I don't work for them anymore, but I still need references from them. Do you think I should give them a heads up before filing, or would that just create problems sooner?

Is it difficult to set up an IP PIN? And what happens if you forget your IP PIN next year when you try to file?

Setting up an IP PIN is actually quite simple. You'll need to create an account on IRS.gov if you don't already have one, which requires some basic verification of your identity. Once your account is set up, you can request an IP PIN through your online account. If you forget your IP PIN when trying to file next year, you have a couple of options. You can retrieve it through your online IRS account if you still have access. If not, you'll need to call the IRS recovery line at a specific number for IP PIN issues, verify your identity, and they can help you recover or reset it. Worst case scenario, you'd need to paper file if you can't recover your IP PIN, but that's rarely necessary.

Is an IP PIN really worth setting up if you don't have any evidence of identity theft? I heard it just complicates things when you file next year.