If an individual has overpaid their Social Security tax, what is the proper action to take?

When an individual has overpaid their Social Security tax, the appropriate course of action is to request a refund and ask for a corrected W-2 from the employer. This is because Social Security tax is typically withheld from an individual's wages by the employer, and if the withheld amount exceeds the allowed maximum for the year, the individual is entitled to recover that excess.

The individual must inform their employer about the overpayment, which may then issue a corrected W-2 that accurately reflects the correct withholding amount for Social Security tax. Subsequently, the individual can file their tax return and claim a refund for the overpaid amount. This ensures that they receive back the excess contribution instead of being left without recourse to recover the overpayment.

Understanding this process is key for taxpayers, particularly in scenarios where they might have multiple employers or some form of employment that leads to excess withholding. The resolution process allows for accurate reporting and ensures compliance with tax laws while also safeguarding the taxpayer’s financial interests.