Why don’t my state and local wages match on my W-2?
Why would state and local wages be different on W-2?
The most common questions relate to why W-2 Wages differ from your final pay stub for the year, and why Federal and State Wages per your W-2 differ from Social Security and Medicare Wages per the W-2. The short answer is that the differences relate to what wage amounts are taxable in each case.
How come my W-2 doesn’t match my salary?
Why is My W-2 Different from My Salary? The compensation may be different on a W-2 vs a final pay stub, but here’s why. Your salary is a gross dollar amount earned before taxes and deductions. Meanwhile, your Form W-2 shows your taxable wages reported after pre-tax deductions.
Why is there no local income tax on my W-2?
That’s very normal. Because the local wages, tips, etc are almost always the same amount as state wages and federal wages, many payroll companies leave that box blank. Don’t worry – you’ll still get credit for the local taxes paid on Schedule A.
Should state wages and local wages be the same?
If you only worked in one locality within the state then, yes, local and state wages would be the same. Local wages are that portion of state wages earned in that locality. So, if all your state wages were earned in one place, they’d be the same.
Whats the difference between state wages and local wages?
State wages, tips, etc: The total state taxable gross pay you received. State income tax: The total state income taxes that were withheld from your compensation. Local wages, tips, etc: The total local taxable gross pay you received. Local income tax: The total local income tax withheld from your compensation.
Should Box 1 and Box 18 match on W-2?
Sometimes Box 1 is lower, but not always. Box 18 is for state and local taxes, not all W-2 will have these. If you are working in an area that has these taxes, it is common for the amount in Box 18 to match those other boxes you have mentioned.
What if my W-2 is wrong?
Call the IRS toll free at 800-829-1040 or make an appointment to visit an IRS Taxpayer Assistance Center (TAC). The IRS will send your employer a letter requesting that they furnish you a corrected Form W-2 within ten days.
Why is my taxable income different from my salary?
Gross income includes all income you receive that isn’t explicitly exempt from taxation under the Internal Revenue Code (IRC). Taxable income is the portion of your gross income that’s actually subject to taxation. Deductions are subtracted from gross income to arrive at your amount of taxable income.
What if my employer messed up my w4?
Payroll employees review every W-4 to catch any errors that could cause problems with the IRS, and withhold taxes from the employee’s paycheck based on the information on the W-4. When mistakes occur, the responsibility may rest on the payroll department or on the employee depending on the circumstances.
Where is state and local income tax on W-2?
Box 17: State Income tax – This amount represents the total of state income taxes withheld from your paycheck for the wages reported in Box 16. Box 18, 19 and 20: Local Wages, Local Income Tax and Locality Name – These boxes apply to out-of-state employees only, whose tax residency states collect local income taxes.
Why is my federal income less than my state income?
State income taxes are lower than federal income taxes. Mainly because the states also assess various types of property taxes, sales taxes, and even locality taxes in some states. While the federal income tax is the main source of federal income.
Can state wages be higher than federal on W-2?
Generally, state wages (Box 16) are higher than federal wages (Box 1) because contributions to SERS and ORP are excluded from federal wages, but not from state wages.