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J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return by J.K. Lasser Institute

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2.1 Salary and Wage Income

The key to reporting your pay is Form W-2, sent to you by your employer. It lists your taxable wages, which may include not only your regular pay, but also other taxable items, such as taxable fringe benefits. Table 2-1 explains how employee pay benefits and tax withholdings are reported on Form W-2.

Table 2.1 Understanding Your Form W-2 for 2012 Wages and Tips

Amount in— What You Should Know—
Box 1 Taxable wages and tips. Your taxable wages, tips, and other forms of taxable compensation (2.1) are listed in Box 1. Taxable fringe benefits will also be included in Box 1 and may be shown in Box 14.
Box 2 Federal tax withholdings. This is the amount of federal income tax withheld from your pay. Enter the amount on Line 62 of Form 1040, Line 36 of Form 1040A, or on Line 7 of Form 1040EZ.
Boxes 3, 4, and 7 Social Security withholdings. Wages subject to Social Security withholding are shown in Box 3. Tips you reported to your employer are shown separately in Box 7. The total of Boxes 3 and 7 should not exceed $110,100, the maximum Social Security wage base for 2012. Social Security taxes withheld from wages and tips are shown in Box 4 and should not exceed the maximum 2012 tax of $4,624.20 ($110,100 × 4.2% rate). If you worked for more than one employer in 2012 and total Social Security tax withholdings exceeded $4,624.20, you claim the excess as a tax payment on your tax return; see 26.9.  Elective salary deferrals to a 401(k), SIMPLE, salary-reduction ...

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