Don’t Have Your W2? Use Your Paystub to Calculate Your Wages
The W-2 form is very important when preparing your tax returns. But sometimes there is a delay in receiving your W-2 and when this happens, you wait anxiously for it hoping that it arrives in time before the tax deadline arrives. You don’t have to wait for the W2 form to calculate your net income; a simple paystub can help you with the figures. With just a paystub in hand, you will be able to calculate W2 wages using just your basic math. The procedure is given below.
You get a paystub every time you receive you wages and this shows you how much you earned for that payroll period and the total you have earned so far. Included in the paystub are the deductions taken out from your wages and what is left from the paycheck.
At the end of the year, you get your final paystub. Your gross and net incomes are shown on this final paystub.
IT is important to first determine your gross income. You final paystub shows your gross income and this includes your monthly salary plus the extra overtime hours, bonuses, or commissions.
Then when your gross income is determined, you need to subtract the wages that are non-taxable. Disability wages, partnership income, employer insurance or gifts are non-taxable income. Add all these up and subtract it from your gross income.
Now consider your other deductions. These pretax deductions can help lower your taxable income amount and there are people who are eligible for this. If you are eligible for pretax deductions, then you should determine this to help lower your taxable income. Employer benefits, retirement accounts, health insurance, life insurance, transportation programs, etc. are some of the other deductions that can be applied to your gross income. Your paystub will indicate the total of these deductions. Then subtract this amount from the result of the previous step. This figure that you get after deduction is your total taxable income for the year.
You next need to determine how much taxes were withheld from your earnings throughout the year. Every paystub gives you a figure of total taxes withheld. You need to multiply this amount with the number of times your are paid each year. If you receive your salary twice a month, then the whole year you get paid 24 times. So, multiply the tax withheld you find in your pay stub by 24 and you get the total tax withheld from your income the whole year. Finally, you need to subtract this total taxes withheld from your total taxable income which we found in step 3. The results would be your net income for the year.
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