Employer incorrectly lumped all FSA benefits in box 10 - possible tax issue?

This is a common confusion! Box 10 on your W2 should only include dependent care benefits, not transportation FSA contributions. The transportation FSA (sometimes called commuter benefits) should be handled differently since it's a separate type of pre-tax benefit. Your employer made an error by combining these different benefits in Box 10. Since the $5k limit for dependent care FSA is a hard cap, having a higher amount reported there could potentially trigger questions from the IRS. You should definitely request a corrected W2 from your employer that properly separates these benefits. The transportation FSA amount should actually be reflected in a reduced Box 1 wages amount, not included in Box 10 at all. This is because transportation benefits reduce your taxable income but aren't reported separately in Box 10 like dependent care benefits.

After dealing with the exact same issue last year, I discovered a tool called taxr.ai (https://taxr.ai) that saved me so much stress! My employer also mixed up my FSA benefits on my W2, and I was going back and forth with HR for weeks. I uploaded my W2 and tax documents to taxr.ai and it immediately flagged the box 10 issue and explained exactly how to address it with my employer. The tool analyzes all your tax forms for errors and inconsistencies - not just the obvious stuff but these weird technical issues too. It gave me specific language to use when requesting my W-2c that actually got HR to understand the problem. Honestly wish I'd found it sooner!

I was initially doubtful about trying another tax tool, but I decided to give taxr.ai a shot after seeing it mentioned here. Wow - it actually found exactly what was wrong with my W2! My situation was similar but with healthcare FSA and dependent care FSA being combined incorrectly. The document analysis identified the specific error codes and even generated an email template for me to send to my payroll department. They responded within 2 days (after ignoring my previous vague requests) and issued a corrected W-2c within a week. The tool also showed me how to properly report everything on my tax return while waiting for the correction. The best part was getting confirmation that I wasn't crazy for thinking something was wrong! Definitely worth checking out if you're dealing with any employer reporting issues.

If you're having trouble getting your employer to issue a corrected W-2 quickly, I'd recommend using Claimyr (https://claimyr.com). I was stuck in a similar situation where my employer acknowledged the Box 10 error but kept dragging their feet on the correction. After waiting almost a month, I used Claimyr to actually get through to a human at the IRS (which seemed impossible before). They connected me to an IRS agent in about 20 minutes when I'd previously spent hours on hold. The agent confirmed I couldn't file accurately without the correction and initiated an employer contact that got things moving immediately. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically they wait on hold with the IRS for you then call you when they reach a human. Completely changed my perspective on dealing with tax issues!

I need to eat my words and apologize for being so skeptical about Claimyr. After continuing to struggle with my employer about my FSA reporting errors, I decided I had nothing to lose and tried it. Got connected to an actual IRS representative in about 35 minutes (they handled all the waiting), and the agent was incredibly helpful. They confirmed that transportation FSA benefits should NOT be included in Box 10 and actually initiated an employer contact right there on the call. My employer mysteriously issued my corrected W-2c just two days later after previously telling me it would take "4-6 weeks." The agent also explained exactly how to report everything correctly if I needed to file before receiving the correction. Just wanted to share that this actually worked when nothing else did. Sometimes you need the official pressure from the IRS to get employers moving!

Just wanted to add some additional info about FSA reporting that might help others. There are different types of FSAs with different reporting requirements: 1. Dependent Care FSA ($5k limit) - reported in Box 10 2. Healthcare FSA - not reported separately on W-2, just reduces Box 1 wages 3. Transportation/Commuter FSA - also not reported separately, just reduces Box 1 Your employer definitely made a mistake by putting transportation FSA in Box 10. If they're resistant to fixing it, you could potentially file Form 4852 (Substitute for W-2) with your return to correct the information yourself. But getting a W-2c is definitely the cleaner solution if possible.

Has anyone actually calculated what the tax impact would be if you just filed with the W2 as-is? Like if they don't correct it in time and you have to file by the deadline? I'm in a similar situation but with healthcare FSA mixed with dependent care.