1. Money

Discuss in my forum

William Perez

What Goes in Box 1 of Form W2? Tax Question of the Day

By January 30, 2006

Follow me on:

Throughout the tax season I will be answering one tax question per day.

Today's question comes from J.M. in California. She asks, "On my annual W-2 Wage & Tax statement that I get from my employer, in Box # 1: Is this supposed to be the total (gross) amount of dollars I made in 2005? Or is it the amount of dollars minus the 401K and medical deductions?"

Box 1 of your Form W-2 Wage and Tax Statement reports your taxable income for federal income tax purposes. Boxes 3 and 5 reports your income for payroll tax purposes (Social Security and Medicare).

Generally, the amount shown in Box 1 is equal to the amount shown in Box 3 (Medicare wages) minus any 401k contributions (shown in Box 12 code "D") any any pre-tax insurance premiums shown in Box 14 (usually labelled "Health Insurance" or "Section 125 Cafeteria Plans" or similar phrases).

You can learn to read your Form W-2 like a tax professional with these easy-to-read articles:

Throughout the tax season I will be answering one tax question per day. Do you have a question? Visit the Ask a Tax Question page. Disagree with my answers? Post your comments in the Tax Forum.

Comments
No comments yet. Leave a Comment
Leave a Comment

Line and paragraph breaks are automatic. Some HTML allowed: <a href="" title="">, <b>, <i>, <strike>

©2014 About.com. All rights reserved.