Boxes 1 and 2: wages and federal withholding
Box 1 is your taxable wages for federal income tax. It leaves out pre-tax items such as traditional 401(k) contributions and many health premiums, so it is often lower than your actual pay. Box 2 is the federal income tax your employer already sent to the IRS on your behalf.
On your return, box 1 goes in as wages and box 2 goes in as tax withheld. If box 2 is bigger than the tax you owe, the difference comes back as a refund.
Boxes 3 to 6: Social Security and Medicare
Box 3 is wages subject to Social Security tax and box 4 is the Social Security tax withheld. Box 5 is wages subject to Medicare tax and box 6 is the Medicare tax withheld. These two wage boxes can be higher than box 1 because 401(k) contributions still count for payroll taxes.
Social Security tax stops at a yearly wage limit, so box 3 can be lower than box 5 for a high earner. Having two jobs can cause too much Social Security tax to be withheld in total, and that excess may be claimed as a credit.
Boxes 7 and 8: tips
Box 7 shows Social Security tips you reported to your employer and box 8 shows allocated tips. Tips you reported should already be in box 1. Allocated tips are a separate item and need to be added to your income if they apply to you, so read the instructions for the year.
Box 12: the letter codes
Box 12 holds amounts with a letter code. Code D is a traditional 401(k) contribution, code DD is the cost of employer-sponsored health coverage, and code W is health savings account contributions through your employer. Other codes cover retirement plans, uncollected tax and more.
Some codes are only informational, and a few need to be reported on your return. Look up each code in the IRS instructions for Form W-2 rather than guessing.
Box 13 and box 14
Box 13 has three check boxes: statutory employee, retirement plan and third-party sick pay. The retirement plan box can limit an IRA deduction, so do not ignore it. Box 14 is anything the employer wants to add, such as union dues, state disability or a transit benefit. It is usually informational.
State and local boxes
Boxes 15 to 20 cover state and local tax. Box 15 names the state, box 16 shows state wages, box 17 shows state tax withheld, and boxes 18 to 20 do the same for a local or city tax. Two lines mean you were taxed by two places, which is common when you live in one state and work in another.
Each line goes to the matching state or local return. A person who moved during the year should check that the split matches where they actually lived and worked.
Spotting a mistake
Check your name, Social Security number and employer details. Compare box 1 with your last pay stub's year-to-date wages less pre-tax items. If something is off, ask your employer for a corrected form, called a W-2c, before you file.
MCC Tax 1040 can read a W-2 PDF and fill in the boxes for you to confirm. Treat that as a draft and check every box against your paper copy.
Common questions
Why is box 1 lower than my salary?
Pre-tax deductions such as a traditional 401(k), some health premiums and some commuter benefits reduce taxable wages in box 1.
What if I never got a W-2?
Ask your employer first. If you have no response by the end of February, contact the IRS, which can request the form on your behalf.
What if my W-2 and my pay stub disagree?
Differences can be timing, such as pay dated in December but paid in January. Ask your payroll office to explain before you file.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.