The Process of Calculating W2 Wages From Pay Stub.
When an individual is not convenient with the procedure involved in filing of taxes, it probably could be a difficult job for them. Luckily, ones pay stub contains all the necessary information they could be required for their W2. Therefore, for one to determine the amount of tax return they are entitled to, the process is very easy as they can trace the information in their pay stub. To determine your taxable income, first calculate the totals up to date on your latest paycheck. Meanwhile, to be sure that you are accurate enough, derive the particular information from that year’s latest paycheck minding that it is not the latest pay period number that one is using. Similarly, individuals may need to have the totals of each and every wage they stood to get in that given year and the amount adjusted if they happened to have any exclusive deductions from taxable income. The exclusive deductions could be: health insurance premiums, reimbursement accounts for dependent care, group life insurance premiums and premiums for dental and vision insurance among other deductions.
The specific items are then each subtracted from ones gross taxable income to give a number similar to the one in box one of the individual’s W2 on receiving. This same process is followed when an individual is calculating their state taxable income and if the information happens to be incorrect, they may have to contact their company’s payroll department to get an explanation why it is so. Regarding determination of taxable wages, for one’s medical care and social security, the process involved is similar to the one applied in determining their taxable income. The only difference is that regarding the tax on social security there is an adequate amount of the individual’s income involved. The tax on social security and medical care pre-deductions could include: life insurance coverage, dental, medical or vision insurance premiums. During the calculation, remember to deduct any paid benefits for employers that the persons may have obtained during the year.
When calculating the W2 wages again, one should note that for an average person, tax time may be somehow confusing as it is not cut and dry all the times. Again remember that one’s personal expenses and exemptions during the year will determine each of their tax return and that use of a pay stub when calculating W2 wages is just but an estimate. Also remember that you basically use your gross pay then remove the necessary pre-tax deductions when determining state and federal taxable income. However the numbers may differ basing on an individual’s particular situation as one could have inclusive personal exemptions.