To clarify my intentions first, this is strictly a question I had out of curiosity. To start, this does relate to my tax return, but here is the situation. This is the first year I started to use a Flex Account (FSA) at work, because I thought it would save me some money. I am claiming one child as a dependent, with almost all of their child care expenses going to the FSA.
After finishing my tax return, I noticed my Federal Tax Refund was quite a bit less than usual, so i created a copy and made some adjustments. What I found is that by using the FSA, I'm losing about 44% of my usual Federal Tax Refund with some rough math and adjustments.
This is going to be slightly skewed, because all I am doing to my wages is adding the Dependent Care Benefits (box 10 on W-2) to my wages (box 1, 3, 5 on W-2) and my child care expenses. This is also considering my tax bracket puts me in the 15% range of $13,250 to $50,400 as a Head of Household (with no spouse).
My question: Is it possible to shift the amounts on a W-2 (with correct adjustments) to tax all of your wages, instead of leaving some of it deducted pre-tax? Ignoring the red flag on the W-2, would this be possible?
I don't plan to do this, because I know without a corrected W-2 (at least), I'm asking to get audited. However, it is more of a serious question, because it would still pay taxes on all of your wages while opting for the federal/state taxes rather than deduct it pre-tax. My thinking would be, the IRS would not like it regardless, because it would involve increasing the refund by a couple hundred US Dollars and changing how I am receiving those wages.