Can I Do Instant Tax Returns Before My W2 Arrives?

If you mail the Internal Revenue Service a return with erroneous information, you could spend months trying to correct your mistakes. You're allowed to complete your tax return based on whatever income information you have available, but in terms of tax law, what you can do and what you should do are often two very different things.

Overview

Every employer who pays an employee more than $600 is required to send that employee a W-2, otherwise known as a wage and income statement. Information listed on an employee’s W-2 includes the employee’s wages and tips, as well as the amount of Social Security, Medicare, federal, and local tax withheld. You need this information to file your federal income tax since it is key in determining whether you overpaid or underpaid your income tax. If you overpaid your tax, you're due a refund, and if you underpaid, you owe Uncle Sam.

Process

The IRS requires that you enter complete and accurate data on your income tax return. If your tax situation is not complicated, meaning you don’t have multiple sources of income which are taxed at varying rates, it is possible for you to complete an instant e-file return before your W-2 arrives. For example, if you work only one job, you could use your pay stub to calculate the amount of income earned and taxes paid during the year, then use that calculation to complete your tax return. The IRS does not forbid you from making that call, and several tax preparation firms actually encourage it.

Risks

If you file a tax return before receiving your W-2, there is always the off chance that you will enter your wage and tax information incorrectly. This means that you may be required to file an amended return later using the wage and tax information listed on your W-2. An amended return cannot be completed by mail and takes 8 to 12 weeks to process.

Considerations

If you do not receive your W-2, or you receive an incorrect W-2, you can contact the IRS after February 14th (of any year) to initiate a complaint with the IRS. The IRS will contact your employer and request that they furnish a W-2 within 10 days. If your employer still fails to provide you with a W-2, then complete IRS Form 4852, which serves as a substitute for your original W-2.