plugginaway22
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Joined: Jan 2, 2011 10:18:42 GMT -5
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Post by plugginaway22 on Apr 6, 2015 12:08:40 GMT -5
My W-2 has only had 401k deducted pre-tax, so the difference between box 1 and 5 was always that amount
This year DH started paying premiums for health care and donating to an FSA which he was told are both pre-tax deductions. But on his W-2, the difference between box 1 and 5 is only the amount of his 401k contribution. His HR is telling him the health ins all comes off before? We are just confused and since he is salary plus commission, I would have to go back and look at every paystub to figure this out.
Thanks for any advice.
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ArchietheDragon
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Post by ArchietheDragon on Apr 6, 2015 12:14:51 GMT -5
The difference is in how the 3 deductions are taxed.
401k - you get to deduct 401k contributions for income taxes. But you do not get to deduct those for FICA (payroll taxes). That is why the wages in box 5 are higher than the wages in box 1.
FSA and health care premiums - YOu get to deduct those contributions/payments for income taxes. You also get to deduct those for FICA (payroll taxes). That is why there is no difference between box 5 and box 1 for those amounts. You employer has already deducted those amounrs from box 1 and box 5 and all of the other boxes.
Sometimes your w-2 has a summary which shows how your gross wages get to your box 1 and box 5 wages, which is nice, because you sould see those items spiked out.
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plugginaway22
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Post by plugginaway22 on Apr 6, 2015 16:00:33 GMT -5
Thank you! Makes sense, but no they do not have the grand total gross amount, so he really made another 8k income. And I guess we can't deduct that because it is below the % of our income.
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ArchietheDragon
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Post by ArchietheDragon on Apr 6, 2015 16:01:52 GMT -5
Thank you! Makes sense, but no they do not have the grand total gross amount, so he really made another 8k income. And I guess we can't deduct that because it is below the % of our income. You also can't deduct it because it has already been deducted by your employer. You can't double dip.
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taxref
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Post by taxref on Apr 6, 2015 18:25:45 GMT -5
ArchietheDragon gives the correct answers above.
Saying the same thing in a different way, one generally cannot take a tax deduction for any fringe benefits which were never included in their taxable income.
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plugginaway22
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Joined: Jan 2, 2011 10:18:42 GMT -5
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Post by plugginaway22 on Apr 6, 2015 19:31:39 GMT -5
Thanks, I guess we just want to know what his actual gross salary was, haha. Will need to keep better track of it this year. Now I don't know if the gross amount on his paystub is before or after the health deductions.
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ArchietheDragon
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Post by ArchietheDragon on Apr 6, 2015 20:14:03 GMT -5
Thanks, I guess we just want to know what his actual gross salary was, haha. Will need to keep better track of it this year. Now I don't know if the gross amount on his paystub is before or after the health deductions. If it says gross it should be gross. You should also see the health care deduction listed on the stub
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rangerj
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Post by rangerj on Apr 9, 2015 8:14:51 GMT -5
The provision of health care, that is medical insurance, for employees by their employers as a tax free employee benefit is the most expensive tax loop hole in the tax code. Keep this in mind when you hear congressmen and senators talking about tax reform and closing the tax "loop holes".
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