How to Read a W-2 Wage and Tax Statement
Students receive a 1098-E return for each year they paid interest on a federal student loan. Students also receive a RL-1098-T slip that shows college tuition, which could qualify for deductions or tax credits. Income is reported to the beneficiary as well as to the IRS each year on a series of information forms. The W-2 is only used for employee income on which taxes have been withheld. It informs employees of the income they must report on their tax returns and the payments they have already made. If you entered the salaries in box 16, box 17 shows the total amount of state income taxes withheld during the year. If you live in a state that has a flat-rate state tax (such as PA), you can verify that your withholding tax is correct by multiplying the amount in box 16 by the flat tax rate. TDA contributions are subject to FICA tax. Your salaries for social security and health insurance taxes (boxes 3 and 5) may be higher than the wages recorded for income tax purposes (boxes 1, 16 and 18). The city sends payroll and tax information to the Social Security Administration and the New York State Department of Taxes and Finance. Taxable salaries consist of gross salaries and other benefits paid to you throughout the year, including the following taxable benefits: Box 12 is the kitchen sink on Form W-2 declarant. Here you can see all kinds of codes. All income coded in box 12 is not taxable.
Here`s a brief overview of the codes (if you`re having trouble reading them, click here): Box 5 shows the salaries that are subject to Medicare taxes. Medicare taxes generally do not include pre-tax deductions and include most taxable benefits. This, combined with the fact that, unlike Social Security salaries, there is no cap on Medicare taxes, means that the number in box 5 can be greater than the amounts specified in box 1 or box 3. In fact, this is probably the largest number on your W-2 form. Keep in mind that your tax return is still due by the filing deadline, so if you don`t have your W-2, you may need to estimate your earnings and deductions to do so on time. (Click here to learn more about getting an extension.) The IRS may delay processing your return — read: refund — while trying to verify your information. To receive your taxable salary for New York State and the city, add the amount in box 14 to the amount in box 1. Only standard annuity deductions and certain “redemption” deductions are included in the amount of the IRC414H.
Deductions for repayment of retirement loans are not included. Social security salaries are not affected by deferred remuneration or pension contributions. Form W-2, also known as payroll and tax returns, is the document that an employer must send to each employee and to the Internal Revenue Service (IRS) at the end of the year. A W-2 shows the employees` annual salary and the amount of taxes withheld from their paychecks. A W-2 employee is a person whose employer deducts taxes from their paychecks and submits this information to the government. The IRS also uses Form W-2 to track an employee`s income and taxes payable. If an employee`s tax-reported income does not match the income reported on Form W-2, the IRS can audit the taxpayer. However, taxpayers are required to report all salary, salary and tip income, even if that income is not reported on a W-2. Box 16: State wages, tips, etc.
– This amount is the sum of taxable wages earned in that state. Box 1: Describes the amount you received in salaries, tips and other allowances. Most TDA contributions are not subject to income tax. Your taxable salary (box 1) and your state and city salary (boxes 16 and 18) will be reduced based on your ADD contributions. You file your federal, state, and municipal tax returns for the lower amount of salary declared. Form W-2 is a U.S. federal payroll and tax return that an employer must submit to each employee and submit to the Social Security Administration (SSA) each year. Your W-2 paycheck and tax return show your total annual salary and the amount of taxes withheld from your paycheck. The total amount indicated in box 3 must not exceed the maximum base of social security wages for that fiscal year.
Most workers pay 1.45% of covered wages for Medicare tax. There is no maximum Medicare salary base for the Medicare portion of FICA. FICA consists of Medicare and Social Security. If you are subject to government tax, box 16 shows the total amount of taxable wages for government tax purposes. You may want to seek help from the IRS at 800-829-1040 if you think it`s possible your employer didn`t send a W-2 or if your employer refuses to give you one. .
- Posted by adriel
- On February 26, 2022
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