Solved: Income w-2 what should the difference be between box 1 and box 3 and which should be a larger number?
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Income w-2 what should the difference be between box 1 and box 3 and which should be a larger number?

On my W-2 my box 1 is greater than my box 3, but on my wifes w-2 box 1 is lower than box 3.   did someone load the wrong value into the wrong w-2 box?  So box 1 is wages, should that be all wages?  Box 3 says "social security wages" should this be wadges minus 401K contribution and oth non-taxable income?  Please enlighten me.  Thanks,
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Income w-2 what should the difference be between box 1 and box 3 and which should be a larger number?

Boxes 1 & 3 (and 5 too) will not necessarily have the same figures.  Most commonly, you'll see Box 3 greater than Box 1, which is -- as you thought -- a result of subtracting pre-tax items such as retirement plan deferrals.

But Box 1 can also be greater than Box 3, since Box 3 (social security wages) is capped at $118,500 of income (for 2016). After that, no additional social security tax is withheld.  Box 5 (medicare wages) is not capped.

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Income w-2 what should the difference be between box 1 and box 3 and which should be a larger number?

Boxes 1 & 3 (and 5 too) will not necessarily have the same figures.  Most commonly, you'll see Box 3 greater than Box 1, which is -- as you thought -- a result of subtracting pre-tax items such as retirement plan deferrals.

But Box 1 can also be greater than Box 3, since Box 3 (social security wages) is capped at $118,500 of income (for 2016). After that, no additional social security tax is withheld.  Box 5 (medicare wages) is not capped.

View solution in original post

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