Commonly Asked Questions: Tax Season Edition

What if my social security number is incorrect on my W-2?

Your first point of contact should be your employer.  Your employer will need to make the correction in their payroll system to correct the invalid Social Security number.  If the W-2 has already been filed by your employer with the Social Security Administration and applicable state and local agencies a form W-2C (Corrected Wage and Tax Statement) must be filed with these agencies to ensure wages are reported under the correct social security number.

How are federal and state withholding taxes determined on my paycheck?

Income taxes are determined by wage brackets that are published each year by the presiding tax authority (i.e., IRS, state & local agencies, etc.).  The amount withheld per paycheck depends on the employee’s income level and information provided by the employee on their form W-4 / corresponding state and local forms.  Amounts withheld can vary depending on allowances for things such as your marital status or
if you are claiming dependents on your tax return.

I want to withhold more/less money on my check.  How do I adjust this?

Changing your withholding will require a new federal form W-4 and corresponding state or local forms.  Each form provides instructions on how it should be completed, based on each employee’s individual situation.  The IRS also provides an online Tax Withholding Estimator for federal taxes located here. This can be a useful tool for helping employees determine how much should be withheld from their paychecks.

Why don’t the total wages on my W-2 match my gross wages from my final paycheck of the year?

The Form W-2 reports the taxable portion of an employee’s wages.  A paycheck reflects all wages, deductions, or adjustments, whether it’s taxable or not.  Some common items that affect the taxable wages reported on Form W-2 include:

  • Retirement Plans – A 401k, IRA, or other retirement plans may allow pre-tax deductions to encourage an employee to participate. The amount deducted pre-tax will reduce the employee’s gross wages to determine their taxable wage reported on the W-2.
  • Health, Dental, and Vision Insurance – An employer may offer a pre-tax health insurance plan as a benefit to the employee. The amount deducted pre-tax from the employee’s paycheck will reduce the employee’s taxable wage reported on the W-2.
  • Reimbursement – Many reimbursements are non-taxable amounts meant to repay an employee for a business expense paid out of their own pocket. Examples of this include mileage, office supplies, and travel expenses.  These amounts will show up on your paystub, but not in your taxable income on your W-2.