"Golden Parachutes" Payment for Federal Employee ?
I have a client who worked for the Veterans Administration all year. Their payroll is handled by Defense Finance & Accounting Service, in Cleveland. The W-2 shows in Box 14, $522.42 for Code K. I figured this was a misprint and they really meant Code C, group term life insurance. But I left it on the W-2 worksheet. So sure enough, the return prints out with $522 tax on Line 17K of Schedule 2.
Sneaky way to make up for the July tax cuts?
After further review, Google tells me "On a DFAS W-2 form, Code K in Box 14 represents pre-tax dental and vision insurance deductions. This is an informational code, and because it is pre-tax, the amount has already been deducted from your taxable wages in Box 1. It is crucial to enter this in Box 14, not Box 12, of your tax software."
