How to Calculate W-2 Wages From the Paystub.
The tax season is one period that many people actually really dread. A good number of people think that they can’t get on with the tax process until they get their W2 form because the information in it is what is used to prepare the tax returns but this is not true. Here is how you go about it.
The first step will be understanding the difference between the paystub, the W-2 and the final paystub because he can get confusing especially if you are not familiar with the tax process or the payroll. The paystub is what you get every payment period from the employer, which will include the amounts that you have made in that period, the deductions and the taxes that have been withheld from your total net earnings.
There is then they final paystub that will have the total annual gross and net earnings. The W-2 shows the amount of the total taxes, both federal and state, that have been removed from your paycheck for the whole year. The W2 will also have information on the total amount you’ve made all year, and the net income too and all this you can get from the paystub which means that with simple math, you can still get the information that you need from the paystubs.
Whilst the paystub may not be exactly the same as the W-2, it still has all the information that you need. Before the taxes withholdings and the deductions, there is the total amount that you make all year which is the gross income and is the first thing that you fond. This total, which will include the overtime pays, the commissions and the bonuses will be in the paystub. There are wages that do not have any of the income, federal or state taxes and the next thing will be to subtract them.
These include the disability wages, the employer insurance, and the gifts and the partnership income among others which you will all add up and subtract from the gross income. The next thing you subtract will be the deductions. The next thing will be determining the total annual taxes, all of them including the federal, the local and the income. You will then multiply them by the number of times that you are usually paid in a year and then you will end up with the total annual taxes. Finally to get the W-2 wages, you will then subtract this total from what to go after subtracting the non-taxable wages and the deductions. You do not have to wait for the W2 when you have basic bah skills.