When preparing tax returns, the W2 form gives us the important figures that are needed in out calculations. 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. The good thing is that even without the W2 form, you can actually calculate w2 from paystub. With just a paystub in hand, you will be able to calculate W2 wages using just your basic math. Find out how below
Every time you get your salary, there is a paystub that accompanies it which shows how much you earned for that period and the year-to-date payroll. Included in the paystub are the deductions taken out from your wages and what is left from the paycheck.
The final paystub is the last paystub you get for the year. In this final paystub, you will find your gross and net incomes for the entire year.
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.
You the need to subtract non-taxable wages to your gross income. Non-taxable wages include disability wages, partnership income, employer insurance, or gifts. You need to add up all the non-taxable wages and subtract it from your gross income.
Now consider your other deductions. There are many people wo are eligible for pretax deductions that can lower their taxable income amount. Some kinds of pretax deductions include employer benefits, retirement accounts, health insurance, life insurance, transportation programs, and more. Your paystub will indicate the total of these deductions. In the previous step we ended up with a figure and deductions should be taken out from this figure. This amount reflects your total taxable income for the year. Click here to learn more about how to calculate w2 from paystub now!
Then find out the total taxes withheld from your income the whole year. The taxes withheld for a certain period is indicated in your paystub. How many times are you paid the whole year? Multiply that number with the tax withheld indicated in your pay stub. A workers who receives wages every 15 days receives his salary 24 time a year. Multiplying the tax withheld every payroll by 24 gives you the total tax withheld the entire year. Then you need to subtract the total tax withheld from your total taxable income. This figure is your net income for the year. Be sure to click this website to gain more details about income statement https://www.britannica.com/topic/comparative-income-statement.
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