My employer has changed my pay status!

My employer has changed my pay status from married to single without my knowledge and without my consent.  Is there anything I can do about that as far as the tax rules or whatever?

B.B., Indianapolis

This is a pretty strange situation. I suppose it’s possible that there is just a mix-up somewhere and your employer got you confused with some single person in the office. I have to admit I’ve not heard of situations where employers arbitrarily change the marital status of employees, but I guess stranger things have happened.

Try speaking with your employer and explaining that an incorrect change in your status has been made. It may be the case that your employer though he was doing you a favor by changing your status so that the tax being withheld would more closely approximate the tax you owe on your tax return, or there may be some other reason for the change.

If there is someone besides your employer who is in charge of the payroll, you can also speak to that person in an effort to find out what happened, and to correct the situation. If all this talk is ineffective, take matters into your own hands and fill out a new Form W-4, indicating the correct filing status.

You can get a copy of Form W-4 from your employer, or from the IRS (call 1-800-TAX-FORM), or on-line at  http://www.irs.gov. If you need to make a change to your Indiana filing status, you will need Indiana form WH-4.

ed: both forms are also available to download right here at Fun with Taxes.

Your employer is required to abide by the instructions you give him on these forms. If it appears that your employer is intentionally ignoring your instructions, you don’t have to deal with this alone. You can contact the IRS and ask that the IRS contact your employer on your behalf. The IRS will explain the rules to your employer, make sure all questions are answered, and help get everything straightened out.

We sold a car, actually traded a car with a friend for about $10,000 worth of stock. He inherited this stock and he has no idea what the base price is, we don’t either. We want to sell the stock, how do we declare a base price when we sell the stock, do we use any price we want, or the time of transaction, or what, how are we supposed to handle this? C.D., Indianapolis

When you report the sale of the stock on your tax return, the IRS will want to know the date on which you acquired the stock, and your cost or basis in the stock. The day on which the car trade took place is the date you will use for your acquisition date. Your basis in the stock is the value of the stock, according to the stock market reports, on the day on which the trade took place. You can call the reference desk at the library and they will be glad to look up the value of the stock on a particular day.

I am assuming you sold the car at a loss, meaning you got less for the car than you originally paid for it. Usually that’s the way car sales go. In some situations, however, there may be a taxable gain to report when you sell a car. For example, if you have used the car for business purposes and have taken a deduction on your tax returns for depreciation, your basis (cost less the depreciation you claimed) may be lower than the price you got when you sold the car. In this situation, you will need to include the sale of the car as a taxable event on your tax return.