Suppose a person receiving $3,000 every 2 weeks (gross pay). Assuming he works for 12 months, then the total amount he makes 72,000 (gross).

Is this how Box 1 is calculated in the W2 form? Could a W2 form be incorrect? For some reason, Box 1 is reporting a much higher number like $100,000. Is this a mistake given the information I provided?

  • If your gross pay is $3,000 every two weeks then you make just over $78,000 in a year (probably you make $78,000 in most years but $81,000 about one year in six), not $72,000. – Mike Scott Jul 5 at 6:44
  • So what happens if the number is wrong? – guest43434 Jul 5 at 7:05
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    Are there bonuses? stock grants? stock options or restricted stock that vested? refund of unused vacation days? There are a lot of things that can be considered income. – user102008 Jul 5 at 7:29
  • @user102008: would a company paying for my hotel count as a wage? – guest43434 Jul 5 at 17:01

Box 1 on your W-2 is the amount of income that is used to calculate your taxes on your tax return. There are very specific rules that the employer must follow to come up with this number. Some of the items deducted from your paycheck are tax deductible (not included in Box 1), and some are not, which are included in Box 1. In addition, some of the things that your employer pays for you (benefits) are taxable, and need to be added to your Box 1 income. There is a list of items that must be included in the Box 1 total in the Employer Instructions for Form W-2, Box 1. Perhaps by looking at that list, you will see something that you recognize that your employer is paying for you.

If you can't figure it out, ask your employer how they calculated that number. They should be able to show how they arrived at the numbers on your W-2.

Yes, it is possible for mistakes to be made on a W-2, but no one here online will be able to tell you for certain that it is incorrect with the information given. Ask your employer to explain it to you, so that if a mistake was made, they can correct it.

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  • But shoukdna company paying for a hotel be on that box? – guest43434 Jul 5 at 18:23
  • @guest43434 It depends what the hotel room was for. Item 2 on the list from the instructions is "fringe benefits," which are taxable and included in Box 1 unless specifically called out as non-taxable in Publication 15-B. A hotel room provided as a part of a business travel expense would not be a fringe benefit, but a hotel room provided as housing while you are at your regular workplace could be considered a taxable fringe benefit. – Ben Miller - Remember Monica Jul 5 at 18:34
  • If the hotel was part of a business trip, it generally isn't income. But if the hotel was part of a moving expense, it generally is income. – mhoran_psprep Jul 5 at 18:34

Start with the pay stubs. These show the numbers for taxable income and the taxes withheld for each paycheck. They also specify the Year-to-date numbers for income and withholding.

If there are things that aren't on a regular paycheck for example a moving expense, or a bonus those may be handled with a separate check, but the associated stub should show if it was taxable, or if any taxes were withheld.

Sometimes these extra items are added to a regular paycheck, but the information on the stub should specify if it is taxable income and if any taxes were withheld.

Some companies pay for excess PTO. They don't have use it or lose it, they pay you if you have PTO over a specific limit. That money is taxable, but again there would be a stub.

Another item that can account for a small delta, is that if the company paid for a large life insurance policy. If the amount of the coverage exceeds $50K, then the cost of the excess coverage is taxable income. For most situations that isn't a large amount of "extra" income, but it can be if for example the company pays for a $1 million policy for every employee.

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  • Should I just assume it is right and get the refund? – taxguywewe Jul 6 at 9:05
  • Did you check the pay stubs. Every number on the W-2 should be verifiable. I have even seen extra information on the W-2 to explain how some of the items are calculated. – mhoran_psprep Jul 6 at 10:16

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