How is my w2 calculated

Many employers have an automated system for submitting an employee's changes for Form W Please be sure to check with your employer to see if they have this option available. If you receive pension income, you can use the results from the estimator to complete a Form W-4P PDF and give it to your payer. This Tax Withholding Estimator works for most taxpayers. People with more complex tax situations should use the instructions in Publication , Tax Withholding and Estimated Tax.

This includes taxpayers who owe alternative minimum tax or certain other taxes, and people with long-term capital gains or qualified dividends. The Tax Withholding Estimator does not ask you to provide sensitive information such as your name, Social Security number, address or bank account numbers. These questions are based on user feedback received. We recommend you refer to the FAQ Page if you have any questions while going through the estimator.

This represents income subject to Medicare tax. There is no maximum wage base for Medicare taxes. Box 6: Medicare Tax Withheld. This amount represents the total amount withheld from your paycheck for Medicare taxes. The Medicare tax rate is 1. Box Dependent Care Benefits. This amount represents any amount reimbursed for dependent care expenses through a flexible spending account.

Only dependent care benefits are reportable in this box. Instead, the gross pay can be found on the employee's final pay stub for the year. In box 1 of the Form W-2, your company reports the total taxable wages of the employee for IRS record keeping.

When you calculate this number, take out any pretax deductions from an employee's pay because they do not count as income for federal income taxes. Examples of pretax deductions include employer-sponsored retirement plan contributions, such as k or b contributions, flexible spending accounts, dependent care, parking if tax-exempt and medical premiums. On the Form W-2, the Social Security wages in box 3 and the Medicare wages in box 5 are calculated slightly differently from the wages subject to income taxes.

The only pretax deductions permitted are dependent care, flexible spending, medical premiums and parking if tax-exempt.