You need to prepare your annual tax returns every year, and you need the information from your W-2 to prepare your tax returns. If you do not have your W-2, it is still possible for you to prepare tax returns by getting the information that to be on your W-2 from one of your paystubs. The paystub is the paycheck that your employer gives you every time they pay you. Among the details found in your paystub include how much you have and for a particular pay period and the year to date payroll, the deductions and taxes that have been taken out of your total earnings, and your net earnings. You also get a final paystub by the end of the year which shows the gross and net income earned throughout the year. The W-2 form, on the other hand, is a tax form which shows the amount of taxes that have been taken from your paycheck during the year. Here is a guideline on how to calculate W-2 wages from a paystub.
The first thing that you need to do is to find your gross income. The gross income will be what you have and through a day without any deductions or tax withholdings. You have this amount on your paystub, which for many people is an hourly rate multiplied by the number of hours that they work in a week. There will also be an inclusion of extra overtime hours, commissions, and bonuses.
After this, you will need to subtract nontaxable wages out of the gross income. The nontaxable wages will be comprised of the wages you received that you do not have any state, federal, or income taxes. The nontaxable wages can include such things as partnership income, gifts, employer insurance, and disability wages among others.
Next, you will need to account for other deductions. Among the things that will be in this category include life insurance, health insurance, transportation programs, employer benefits, and retirement accounts among others. You will subtract the sum of these deductions from what you got in the second step. What you get is your taxable income for the year.
The next thing that you will do is to determine your annual taxes. Find out what amount of state, local, and income taxes on your paystub which are withheld from your earnings. You will then multiply these numbers by the number of times that you get paid each year. The number that you get will be the total amount of taxes that will be withheld from your earnings that year.
The final step will involve subtracting the total taxes to be withheld from your income from the amount calculated in step three. This will represent your W-2 earnings already or net income for the year.
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