{"id":242,"date":"2015-03-14T16:32:00","date_gmt":"2015-03-14T20:32:00","guid":{"rendered":"http:\/\/blog.etax.com\/?p=242"},"modified":"2015-02-09T16:32:36","modified_gmt":"2015-02-09T21:32:36","slug":"w-2-explained","status":"publish","type":"post","link":"https:\/\/www.etax.com\/blog\/2015\/03\/14\/w-2-explained\/","title":{"rendered":"The W-2 Explained"},"content":{"rendered":"

You can use the following guide to understand what each box of your W-2 reports.<\/p>\n

Box 1- <\/strong>reports all wages, tips<\/a>, bonuses, prizes, and compensatory benefits. Not included in this income are elective deferrals for retirement funds, payroll deductions, or benefits before tax.<\/p>\n

Box 2<\/strong> \u2013 indicates the amount of money withheld from your pay for federal taxes over the year.<\/p>\n

Box 3 \u2013 <\/strong>indicates the total amount of your wage income that is subject to Social Security taxation. Because this is figured before deductions, this amount can be greater than what is listed in the first box of the W-2. In the case of a high wage earner, box 3 may report lower than the total of box 1, as it can\u2019t exceed the Social Security wage base, which is $117,000 for 2014.<\/p>\n

Box 4 \u2013 <\/strong>reports the amount of taxes withheld in accordance to Social Security taxation rates. These rates are calculated at a rate of 6.2%. Box 4 is essentially the amount listed in Box 3 multiplied by 6.2%. Because of the maximum wage base relative to Social Security withholdings, the amount in Box 4 can\u2019t exceed $7,254.00.<\/p>\n

Box 5 – <\/strong>shows the total wages that are applicable to Medicare taxation. Typically, these taxes aren\u2019t inclusive of pretax deductions, and will include most benefits eligible to be taxed. Because there is no maximum cap for Medicare as there is for Social Security, the amount reported in Box 5 has the potential to be much larger than any other amount indicated on your W-2, including Boxes 1 and 3.<\/p>\n

Box 6 \u2013 <\/strong>indicates the amount of Medicare taxes withheld. Similar to Social Security, Medicare taxation is also calculated on a flat rate: 1.45%. In most cases, the amount listed in Box 6 is the answer to the amount in Box 5 multiplied by 1.45%.<\/p>\n

Box 10<\/strong> \u2013 If you received any benefits for dependent care assistance, that amount is listed in this box. Amounts under $5,000 are non-taxable benefits. This box reports the total value of all dependent care benefits, even if it is higher than $5,000. The excess of the $5,000 will be represented in the figures of boxes 1, 3, and 5.<\/p>\n

Box 11 \u2013 <\/strong>any amount you received as a distribution from your employer as part of a non-qualified deferred compensation plan is taxable, and reported in box 11. This is separate from contributions you have made which will be evident in Box 12.<\/p>\n

Box 12-<\/strong> There are a variety of codes found in Box 12, although not all of the reported income is taxable. The most common codes are:<\/p>\n