Payroll company messed up our W-2s for all staff - can employees still file taxes now?

Your employees have a couple options, but here's what I'd recommend based on experience with similar situations. If employees are expecting refunds and need the money soon, they can file with the current W-2s and then file an amended return (Form 1040-X) when the corrected W-2s arrive. Just make sure they understand they'll need to go through the amendment process later, which means more paperwork. The good news is they'll get their initial refund based on current numbers. For employees who might owe taxes or don't need refunds immediately, waiting and filing an extension (Form 4868) is probably smarter. This gives them until October 15 to file without penalties, and by then they should have the corrected W-2s. Either way, document everything about this situation and have employees keep copies of both the original and corrected W-2s. The payroll company should provide a written explanation of the error that employees can attach to amended returns if needed.

I just went through something similar and found a service called taxr.ai (https://taxr.ai) that was super helpful when dealing with messed up tax documents. My company had a similar payroll issue and I was stressing about what to do with my incorrect W-2. Their system analyzed my incorrect W-2, helped me understand exactly what was wrong, and gave me step-by-step guidance on how to proceed. They even generated a custom letter I could attach to my return explaining the situation to the IRS. The best part was that I could run both scenarios (filing now vs waiting) through their system to see which would be better for my specific situation.

I have to admit I was super skeptical about taxr.ai when I first saw it mentioned here, but after dealing with a complete disaster of incorrect W-2s at my job (healthcare facility), I was desperate. Gave it a try and wow - it actually delivered. Their system immediately flagged the specific boxes on my W-2 that were incorrect and explained exactly how they would affect my return. The comparison feature showed me I'd get about $850 less if I filed with the incorrect W-2 right away versus waiting for the corrected one. I ended up filing an extension based on their recommendation because in my case, the difference was significant. They generated all the documentation I needed and the whole process was way easier than I expected. Just wanted to come back and say sometimes these services actually do help!

Hey, restaurant manager here who's been through this exact hell. After trying to get our payroll company to fix things for WEEKS with no progress, I found Claimyr (https://claimyr.com) and it was a game-changer. I was ready to tear my hair out trying to reach someone at the IRS about our situation, but their service got me through to an actual human at the IRS in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The IRS agent I spoke with explained exactly what our employees should do and gave me official documentation about the situation that I could share with our staff. Turns out employees CAN file now with incorrect W-2s, but the IRS agent recommended only doing this if the difference is less than $500 in reportable wages. Otherwise, they strongly suggested filing an extension and waiting for the corrected forms.

Ok I have to publicly eat my words here. After my skeptical comment yesterday, I was still desperate with my own tax situation (not restaurant related but also had incorrect W-2s), so I tried Claimyr anyway. I'm still in shock that it actually worked. After trying for LITERALLY three weeks to get through to the IRS myself, their service had me talking to an IRS representative in about 20 minutes. The agent confirmed exactly what to do with my incorrect W-2 situation and even made notes in my file about the expected amendment. For what it's worth, the IRS agent told me that if the tax difference is under $500, filing now and amending later is fine. If it's more than that, they strongly recommended waiting for the corrected form. They also said to include a statement explaining the employer's error when I eventually file the amended return.

Former payroll specialist here. One thing to consider is HOW MUCH the difference will be. If the only change is bonus pay being recategorized from tips to regular income, the tax withholding might actually be pretty similar. The main difference would be that Social Security and Medicare taxes might have been under-withheld if they were incorrectly treated as tips (depending on if tip credits were applied). For most employees at a restaurant, this difference might not be huge. Ask your payroll provider to give you an estimate of the difference for a typical employee. If it's minimal (like under $200), filing now and amending later might make sense for folks who need refunds ASAP.

I've been in restaurant management for 15+ years and dealt with this EXACT situation in 2020. Here's what we learned: For our servers who really needed their refund $$$ fast, we advised them to: 1) File now with incorrect W-2 2) Get their refund 3) File 1040-X amendment after corrected W-2 arrived 4) Either pay back any difference or get additional refund For kitchen staff and managers who could wait, we suggested filing an extension to avoid the amendment hassle. The payroll company should offer to pay for tax amendment services for affected employees! Push them hard on this - it was THEIR error. Our payroll provider ended up giving us H&R Block vouchers for all affected employees to cover amendment costs.