Case Study: My Experience With Payroll
Steps Involved When Calculating W2 Wages From Pay Stub.
If one is not convenient with the procedure of filing taxes, it can be a tasking job for them. Luckily, ones pay stub contains all the necessary information they could be required for their W2. Thus for an individual to determine the amount of tax return they are entitled to, they can easily do so by tracing this information in their pay stub. When calculating an individual’s taxable income, they first do the totals up to date on their latest paycheck. Remember, to enhance enough accuracy, one should get the given information from the year’s last paycheck and on the same taking care that it is not the latest pay period number that the individuals are using. On the same, one may need to have the totals of every wage that they stood to get in that particular year and the amount adjusted if one happened to have any exclusive deductions from taxable income. Among the exclusive deductions could be: health insurance premiums, reimbursement accounts for dependent care, group life insurance premiums and premiums for dental and vision insurance and other deductions.
The given items are each subtracted from individual’s gross taxable income to give a number that is equivalent to box one of one’s W2 on reception. This same process is followed when an individual is calculating their state taxable income and if the information happens to be incorrect, they may have to contact their company’s payroll department to get an explanation why it is so. On the issue of calculating taxable wages for an individual’s medical care and social security, the procedure involved is equivalent to the process followed when determining their taxable income. The only difference is that regarding the tax on social security there is an adequate amount of the individual’s income involved. Some of the pre-deductions involved in the social security tax and medical care include: life insurance premiums and dental, medical or vision insurance premiums. Again, during the calculation, individuals should not forget to deduct any paid benefits for employers that the persons may have obtained during the year.
During the W2 wages calculation, one should note that for an average person, tax time may appear confusing as it is not cut and dry always. Again remember that one’s personal expenses and exemptions during the year will determine each of their tax return and that use of a pay stub when calculating W2 wages is just but an estimate. Essentially, know that you usually use your gross pay then remove the necessary pre-tax deductions when determining state and federal taxable income. A times the numbers are likely to differ in reference to an individual’s particular situation as one could have inclusive personal exemptions.