Open TurboTax

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

cancel
Showing results for 
Search instead for 
Did you mean: 
wolf570
New Member

Tax on Social security wages

My W2 shows SS wages in Box 3 as less than Wages/tips in Box 1.    Don't know why.   Amount in W2 Box 4 is 6.2% of Box 1.   Turbo Tax reported that Box 4 calculation should be based on Box 3 rather than Box 1 wages. Difference is $100.   Which one is correct?     Tom

1 Best answer

Accepted Solutions
BillM223
Employee Tax Expert

Tax on Social security wages

As you see, "Total tips reported by the employee to the employer (not allocated tips)" are included in Box 1 but not in Box 3. 

 

The definitions of both are rather detailed and lengthy, so I encourage you to read the IRS W-2 Instructions on pages 16 and 17 where the entries are described.

 

Note that these are instructions to your employer on how to complete your W-2, so it tells you exactly what you want to know.

 

As for Box 4, there is an interaction between Boxes 1, 3,  and 7, wherein Box 7 has Social Security tips ("the tips that the employee reported to you even if you did not have enough employee funds to collect the social security tax for the tips.")

 

Read the instructions for Box 4 and Box 7 and see how this applies to your W-2 (I assume that you have an entry in Box 7).

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

2 Replies
wolf570
New Member

Tax on Social security wages

My W2 Box 1 includes tips and wages.  How are Soc Security wages calculated? 

Tom   

BillM223
Employee Tax Expert

Tax on Social security wages

As you see, "Total tips reported by the employee to the employer (not allocated tips)" are included in Box 1 but not in Box 3. 

 

The definitions of both are rather detailed and lengthy, so I encourage you to read the IRS W-2 Instructions on pages 16 and 17 where the entries are described.

 

Note that these are instructions to your employer on how to complete your W-2, so it tells you exactly what you want to know.

 

As for Box 4, there is an interaction between Boxes 1, 3,  and 7, wherein Box 7 has Social Security tips ("the tips that the employee reported to you even if you did not have enough employee funds to collect the social security tax for the tips.")

 

Read the instructions for Box 4 and Box 7 and see how this applies to your W-2 (I assume that you have an entry in Box 7).

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

About Community

Learn about taxes, budgeting, saving, borrowing, reducing debt, investing, and planning for retirement.

3.48m
Members

2.6m
Discussions

Manage cookies
v