How to Calculate W2 Wages From Pay Stub

How to Calculate W2 Wages From Pay Stub
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Filing your taxes can be a tedious chore if you're not familiar with the process. However, all of the information you need for your W2 is located directly on your pay stub. You can easily locate this information to know approximately how much your tax return will be. Read on if you're interested in learning about how to calculate W2 wages.

Determine Your Taxable Income 

You can find the year to date totals on your most recent paycheck. For better accuracy, get this information from the last paycheck of the year. Also, make sure that you're not using the number for the most recent pay period. You'll want the total of all the wages that you've earned that year. This amount may need to be adjusted if you have any deductions that are excluded from taxable income.
These types of deductions will include:

  • 401(K) deductions 
  • Premiums for health insurance
  • Premiums for group life insurance
  • Vision and dental insurance premiums 
  • Dependent care reimbursement accounts 

You will subtract any of these items from your gross taxable wages. The number you come to should match the number you see in Box 1 on your W2 when you receive it. You'll take these same steps when figuring out your state taxable income. Should this information be incorrect, you may need to reach out to your company's payroll department for an explanation. 

Calculate Medicare and Social Security Taxable Wages 

Calculating your W2 wages for Medicare and Social Security taxable wages is similar to finding your taxable income. However, there is a maximum amount of wages that is taxable for social security tax. For any wages earned during the year of 2017, this is capped at $127,200. You'll start by looking at your most recent pay stub. Look at the gross taxable income for the year to date. You will take this number and subtract any pre-tax deductions. These pre-tax deductions will be similar to your federal and state wages. However, they are not identical. Pre-tax deductions for medicare and social security taxes will include:

  • Insurance premiums (medical, dental, or vision insurance)
  • Life insurance premiums up to $50,000 in life insurance coverage

Also, remember to deduct any employer paid benefits that you may have received throughout the year. 

Things to Note When Calculating Your W2 Wages

Tax time can be a bit confusing for the average American. It's not always cut and dry. Each tax return will depend on your personal exemptions and expenses throughout the year. You should note that when you're using your pay stub to calculate W2 wages this is only an estimate. When figuring out your federal and state taxable income, you're essentially using your gross pay and removing your pre-tax deductions. But these numbers could differ based on your specific situation. You may have additional personal exemptions that should be included.If you are still having trouble figuring out your taxable income, you should reach out to a professional or your local HR for more information. 

Have you recently figured out your W2 wages with just your pay stub? Let us know in the comments! 

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About the Author How to Calculate W2 Wages From Pay Stub James Wilson

After graduating from McCombs School of Business in Texas, James joined ThePayStubs as a CPA, in order to make sure the numbers we provide our clients... Read More

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