Ask TaxMama.Com Tax Information With A Mother's Touch Published by Eva Rosenberg, MBA, EA Volume 6, Issue 273        August 27, 2004

Condo For Business Dad's House Generous Ex What's In (or out of) a W-2?     Treasury and IRS Issue Depreciation Regulations   Sunday Sermon   E-Mail  This Page To A Friend Your email: Your name: TO email:

What's In (or out of) a W-2? » From: New Jersey Dear TaxMama: I have a question with regards to W-2s and how they are compiled. The reason I ask is because there is a discrepancy between my year-end payroll stub and my W-2. The total on my W2 was roughly $10,000 higher than on my yearly pay stub. This is despite the fact that I donated the maximum amount to my 401k (pre-tax) and was reimbused for tuition (non-taxable). Can you give me some insight on this? Thanks! -Glenn Uh Glenn, That's a very good question. Usually, just the reverse happens. Usually, your total on your paystub is higher. Then, once the W-2 is prepared, and all the deductions for 401(k)s and tuition, etc. come out, your box 1 amounts are much lower. Of course, the Social Security/Medicare boxes will show the higher amount. What could make the 1 box higher than you expect? Hmmm ... did you exercise some stock options? Was there an adjustment in their retirement plan for their highly compensated employees that kicked income back into your W-2? Was there a separate bonus check you forgot about? Do they give you a car or other major equipment for personal use? These are some of the things that would bring about a discrepancy like that. (Yes, I know, someone is bound to bring up life insurance of over $50,000 coverage - but those premiums wouldn't increase your wages by $10K.) Rather than try to guess at the mystery, I have an idea. What a flash of insight! Call your payroll department and ask them to give you the details that went into your W-2. Companies that use ADP for payroll services provide that nice reconciliation right on their W-2s. It could simply be an error - and they will either fix it for you - or ask them for the extra $10,000 .... that wil get their attention in a hurry. But you have the right idea. Best wishes, Eva Rosenberg Your TaxMama

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