How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Wendy Reed Your Own Question
Wendy Reed
Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3346
Experience:  15+ years tax preparation and tax advice.
Type Your Tax Question Here...
Wendy Reed is online now
A new question is answered every 9 seconds

I need tax advice and documentation supporting a W-2 ...

Resolved Question:

I need tax advice and documentation supporting a W-2 dispute I am having with my former employer.
Submitted: 8 years ago.
Category: Tax
Expert:  Wendy Reed replied 8 years ago.

Hello there,

What type of dispute are you having?

Customer: replied 8 years ago.
Hi Wendy,
I seperated from my employer in August. As a part of my separation agreement, they agreed to pay for the balance of the lease on a home that I had in North Carolina (we had not sold house in Ohio). The separation agreement is very clear that I am responsible for taxes on the lump sum payment. For the lease, the statement was that the company would assume full payment of the lease. They have added those payments to my W-2. I believe that by stating that they were assuming the lease and they paid rental company directly that it is a business expense and the 22K they put on my W-2 should not show up as income to me.
Customer: replied 8 years ago.
They are trying to claim this as moving costs.
Expert:  Wendy Reed replied 8 years ago.


I am confused by your description. You say that the agreement is very clear that the lump sum (your company paying the lease off) is a benefit that you are responsible for the taxes on. Since they are treating this payment as compensation, it is being added to your W2, and subject to tax. Then you object to it being added to your W2?

A business (your company) does write off or deduct wages/compensation as business expenses, but this does not negate the fact that this compensation is taxable to you as income. Even if they paid the leasing company directly, this is considered a "third party" transaction, in that they are paying exenses on your behalf.

In addition, even if this is considered "moving expense" reimbursement, the cost of breaking a lease or paying off a lease is not a deductible type of expense, so it would not be eligible to be treated as nontaxable compensation.

Customer: replied 8 years ago.

I am sorry.

There were two parts to the separation agreement:

Part One - a cash lump sum - "this payment is subject to all applicable taxes and withholdings."

Part Two - "company will assume full payment of the lease for the remainder on the current lease term of the home"

There is no "catch all" I am responsible for taxes on this. My point is that they assumed the lease and therefore this is an expense like any other office space, travel, or normal business expense.

Is that a potential interpretation I could argue with a leg to stand on, no matter how feeble??? :-) With the amount we are talking and their desire to not have me dispute with IRS, I think I just need to give them a viable out.
Expert:  Wendy Reed replied 8 years ago.

If they are open to negotiation, you may suggest that they "gross-up" the payment of the lease. This is a common strategy used when the employer desires that the employee receive the full cost of a benefit that is reduced because of income and payroll taxes.

When an amount is grossed up, there is an equation used that takes into consideration the employee's federal and state tax brackets, and adds the SS and Medicare %'s. Then, when this "grossed-up" amount is added to the employees income, he or she will realize the approximate value of the benefit.

For example, if you are in the 15% bracket, and pay approx. 10% SS, Medicare and state tax, and you receive a taxable benefit of 1000 dollars, you only see 750. So the employer would need to pay you approx 1332 dollars for you to realize the net benefit.

You could argue that your "agreement" does not state that you will be paying tax on the lease payment, and that you are prepared to dispute it with the IRS, and possibly with an attorney. Then you could suggest grossing up the lease payment as an "out" for them.


Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3346
Experience: 15+ years tax preparation and tax advice.
Wendy Reed and other Tax Specialists are ready to help you
Customer: replied 8 years ago.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Previous | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA

Meet The Experts:

  • Wallstreet Esq.

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    10 years experience
< Last | Next >
  • Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    10 years experience
  • Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • Richard's Avatar


    Tax Attorney

    Satisfied Customers:

    29 years of experience as a tax, real estate, and business attorney.
  • Robin D.'s Avatar

    Robin D.

    Senior Tax Advisor 4

    Satisfied Customers:

    15years with H & R Block. Divisional leader, Instructor
  • Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
  • jgordosea's Avatar


    Enrolled Agent

    Satisfied Customers:

    I've prepared all types of taxes since 1987.
  • R. Klein, EA's Avatar

    R. Klein, EA

    Enrolled Agent

    Satisfied Customers:

    Over 20 Years experience