Understanding Form W2

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The W-2 can be a bit confusing. It is important to keep in mind a few items while reviewing your W2


Verify your SSN

Please be sure the SSN is accurate. If it does not match your SSN, please alert your employer so that a revised W2c can be produced.

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Your wages listed in boxes 1, 3, 5, & 16 are the amount of Taxable Wages not Total Wages

Deductions from your pay taken under a pretax S125 plan will lower your wages listed in these boxes on you W2.  Common items that fall under the S125 plan are Health, Dental, Vision premiums, H.S.A. contributions, Flex plan, and certain supplemental insurance plans.  Retirement Funds will lower your box 1 Federal wages & box 16 State wages; they do not lower your Medicare or Social Security wages.

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Box 7 Social Security tips are often forgotten

It's more a product of the W2 layout, but for those in the service industry in particular make sure all boxes were input from the form.

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HSA box 12W

This often confuses people as this amount includes money withheld from your pay pretax under an S125 plan.  "But it was my contribution?"  Yes that is true, but you weren't taxed on it so technically it was an elective deferral from your salary that your employer contributed falling under the S125 plan rules.

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Not enough or no withholding is listed

Part-time workers, employees that work for multiple employers, or Two-Earner Households commonly are those that may experience difficulties gauging the proper W4 settings and/or question the withholding or lack thereof from their paychecks.  Encourage them to use the IRS Withholding Calculator to assist.

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Box 12 codes

Box 12 Codes are items that typically will require additional input on a 1040 and likely will prevent you from filing a 1040EZ return.  The full list is shown on the back of your original W2 or again here.

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Wages listed are those associated with the year in which they were paid, not the year earned

For instance, if you were hired in late December, but not paid until January you would not have a W2.  Your check date is the driver not the pay period.

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The IRS & most States do not need the official pressure sealed copy

In fact the IRS doesn't need a copy at all.  Most if not all states will accept a reprinted standard version of your form on regular paper.  It has been some time, but we have seen in rare instances in North Carolina where an employer original copy was required.

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Employee Address Wrong

Your W2 does not need to be updated before you file your return.  Your 1040 will dictate the address submitted to the IRS not the form W2.  If you lost your W2 read more here.

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Further reading

see full IRS Form W-2 Instructions

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