I need to dissolve a NYC S corporation. I think there are additional steps that need to be taken into consideration. Please advise.
The W-2 form is a document that employers must furnish to their employee(s) by the February 2nd, 2015 for the 2014 tax year. The deadline is generally January 31st, but this year it fell on a Saturday. The IRS and the State will also receive a copy of the form. Furthermore, the taxing authorities will match the information on this W-2 form with the information provided on your tax return. If there are any mismatches, depending on the error, it can automatically trigger an initial rejection of your tax return or a correspondence audit.
As a working individual, you earn income is subject to federal, state, city and payroll taxes (social security & medicare). The amount of income taxes (not payroll) that are withheld throughout the year depends on the information detailed on the federal form W-4 and state form (NYS uses form IT-2104, each state has a different form) that you completed when you commenced work for your employer. Please note that the more exemptions you claim, the less tax withheld for federal and state income tax purposes.
Let us review the concept of how state taxes impact federal tax returns.
On New York State tax forms IT-201-I, or IT-150, or NYC-202(4), the taxpayer is subject to either individual or business income tax. However, on Schedule A or Schedule C of federal form 1040, the taxpayer may deduct state and local income taxes. Specifically, if the taxpayer elects to itemize deductions on Schedule A, state and local taxes would be included in the schedule. Please note though that the state taxes remitted during the year are generally not equal to the total amount due at the end of the tax year. Moreover, the taxpayer will end up either owing additional taxes or receiving a refund for taxes overpaid.