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Returning Member
posted Oct 25, 2022 1:56:56 PM

Question about W2 box 1,2,3 5, 16

1) W2 - Box 1:  is it for Gross income or Taxable income?
2) W2-Box 3, 5, and 16:  are they for Gross income or Taxable income? Will there are the same number for these boxes?
3) For box 12 code b: I have 401 K. If I contribute the total of $3,000 and my company match me to a total of $2,000. Would the box 12b is the sum up of my 401K contribution and my company 401k match?
 
Thank you very much for your help answering these questions

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4 Replies
Level 15
Oct 25, 2022 2:23:38 PM

1) W2 - Box 1:  is it for Gross income or Taxable income?  Neither  ... it is net of pre tax items like retirement or health insurance listed in box 12.
 
2) W2-Box 3, 5, and 16:  are they for Gross income or Taxable income? Will there are the same number for these boxes?   Neither ... it is either the gross income  or  net of certain pre tax items not subject to SS/Medicare taxes.
 
3) For box 12 code b: I have 401 K. If I contribute the total of $3,000 and my company match me to a total of $2,000. Would the box 12b is the sum up of my 401K contribution and my company 401k match?  Box 12 code D will include the amount contributed to the 401K by both you only.  Read the rules here : https://www.irs.gov/instructions/iw2w3

Level 15
Oct 25, 2022 3:00:16 PM

Box 1 is your federal taxable income.  It's your gross income, minus certain pre-tax deductions like health insurance premiums and 401k contributions.  

 

Box 3 and 5 is income subject to employment tax (social security and medicare tax).  This is your earned income (income earned from performing a service), and most items (like a 401k) that are deductible from your taxable income are not deducted from your earned income, so box 3 and 5 will often be larger than box 1.     However, a few items are deductible from both your box 3 wages and your box 1 wages, so it is possible that neither box 1 or box 3 and 5 will represent your gross salary.

 

Furthermore, for 2022, only the first $147,000 of your income is subject to social security tax, while all your earned income is subject to medicare tax.  So the value in box 3 should never be more than $147,000, even your salary and boxes 1 and 5 might be larger.  

 

Box 16 is your state taxable income.  It will often be the same as box 1.  However, some states do not allow a state tax deduction for items that have federal tax deductions.  For example, in California, a health savings account (HSA) is not deductible on your state income tax return, so if you have an HSA, your box 16 state wages will be larger than your box 1 federal taxable wages by the amount of your HSA.  Whether box 1 and 16 are the same or different depends on what kinds of benefits you have and your state tax laws. 

 

Box 12 code D is only your elective deferral (your salary reduction).  

Returning Member
Oct 25, 2022 4:27:07 PM

Thank you so much for the clarification.

Returning Member
Oct 25, 2022 4:27:44 PM

Thank you very much for the clarification.