Feel confident doing your own taxes. Just answer simple questions about your life, and TurboTax Free Edition will take care of the rest. For Simple Tax Returns Only. What is a W-4 Form? Claiming the Foreign Tax Credit with Form What is the IRS Form ? Estimate your tax refund and where you stand Get started. See if you qualify for a third stimulus check and how much you can expect Get started.
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Learn what education credits and deductions you qualify for and claim them on your tax return Get started. Toggle navigation. Need help now? Get started online or call us today. Get Started. Call Us Toll Free How many Tax Allowances should you Claim? Watch the video: Whenever you get paid, a certain amount of income tax is automatically withdrawn or withheld from your paycheck and turned over to the IRS. A married couple can combine their incomes and file a single joint account.
This tends to be the number most taxpayers care about the most. Box 2 reports the total amount of federal income taxes withheld from your pay during the year. This amount is determined by the elections on your form W-4 based on exemptions and any additional withholding. If you find that this number is too low or too high, you'll want to make an adjustment to your withholding in keep in mind that those numbers may change due to tax reform.
Box 3 shows your total wages subject to the Social Security tax. This figure is calculated before any payroll deductions which means that the amount in box 3 could be higher than the number reported in box 1, as in my example.
It could also be less than the amount in box 1, if you're a high-wage earner, since the total of boxes 3 and 7 see below cannot exceed the maximum Social Security wage base. If you have more than one job, for Social Security tax purposes, the cap still applies. Box 4 shows the total of Social Security taxes withheld for the year. Unlike federal income taxes, Social Security taxes are calculated based on a flat rate. The rate is 6.
The amount in Box 4 should, then, be equal to the amount in box 3 times 6. Since you should not have more Social Security withholding than the maximum wage base times 6. Box 5 indicates wages subject to Medicare taxes.
Medicare taxes generally do not include any pretax deductions and will include most taxable benefits. That, combined with the fact that unlike Social Security wages, there is no cap for Medicare taxes, means that the figure in box 5 may be larger than the amounts shown in box 1 or box 3.
In fact, it's likely the largest number on your form W Box 6 shows the amount of Medicare taxes withheld for the year. Like Social Security taxes, Medicare taxes are figured based on a flat rate. The rate is 1. For most taxpayers, this means that the figure in box 6 is equal to the figure in box 5 times 1. Your employer must also withhold additional Medicare tax of. Since your employer doesn't know your entire financial picture, it's possible that you may have to pay more additional Medicare taxes than your withholding depending on filing status, compensation and self-employment income.
Tips which were reported to your employer will be found in box 7. If this box is blank, it means that you did not report tips to your employer unreported tips are still taxable. Allocated tips reported in box 8 are those that your employer has attributed to you. Those tips are considered income to you.
For more on tip income, click here. Box 9 is relatively new. You may see a digit verification code here. It's part of a growing security initiative to assist the IRS with verifying that the form is authentic. You won't get away with anything if you just shove your W-2 in a drawer and decide not to put the information on your tax return.
What is a W-2? How do I get my W-2? When should I receive my W-2? You need your W-2 to do your taxes. Get started. How a W-2 works. What to do if your W-2 is wrong. Your W-2 information is not a secret. On a similar note Dive even deeper in Taxes. Explore Taxes. Get more smart money moves — straight to your inbox. Sign up.
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