My wages for box 1 are smaller than the social security/medicare wages (box 3 & 5)

[patriciaedwards7]

Hi there, My wages are a smaller amount than what is in box 3 and 5. Is this normal?

[jd50]

Why is turbo tax increasing my tax bill when I input the Medicare wages?

[jerry2000]

Probably because you made enough to trigger the extra Medicare tax.

[jerry2000]

Yes, that is normal. Box 1 is the amount of your pay that is subject to income tax. If you make pre-tax contributions to a 401k, 403b, or similar, that amount will not show in the Box 1 amount, but it will be in the Box 3 and 5 amounts. Why? The income is subject to Social Security tax (Box 3) and Medicare tax (Box 5) but not to income tax (Box 1). Also, if your employer has a Sect. 125 or "cafeteria" benefits plan, the medical insurance premiums that you pay do not show in the Box 1 amount, but do show in Box 3 and Box 5.

[vola87]

my question would then be, when asked to allocate how much of an income was from a certain state, do we put in the amount listed in box 1 or 3 or 5?

[jerry2000]

You use the amount in Box 1. Boxes 3 and 5 have no influence on a state return.

[SMB]

Old thread but want to clarify for anyone reading this; Section 125 (cafeteria) benefits are not reflected in wages in Box 1, Box 3 or Box 5 of your W2.  

[Goobie2107]

IS  BOX3 AND 5 USED FOR CITY TAXES

[katriproff]

Local and city tax uses box 1....like states, I think...


and my sect 125 benies are in box 3 and 5, not 1.....I guess some employers do things the right way and some employers  don't...are employers allowed to pick and choose what they include for SS and Medicare wages?  My girlfriends 125 stuff isn't in box 1, 3, or 5....but mine are, and I don't have a 401 or any savings plan, only health and fsa
....