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Montgomery County Department of Finance

W2 Frequently Asked Questions

Why doesn't the amount in Box 1 match the "YTD Earnings" listed on the bottom of my final 2011 paycheck? Box 1 excludes tax-deferred retirement contributions as well as pre-tax benefits such as medical, dental, health care reimbursement, dependent care reimbursement, parking and vision insurance. Why doesn't Box 1 match Box 3 and Box 5? Box 3 and Box 5 include your tax-deferred retirement contributions. Box 1 does not. Is there a simple explanation for what is in each box of my W-2? Here is a brief explanation of what is in each box. If you believe an amount is incorrect, please contact Payroll at 240-777-8840.

Box # Explanation
Box 1: These are your earnings/wages minus all of your pre-tax deductions. If you contributed on a tax-deferred basis to retirement or had any pre-tax benefits, this will not match your year-to-date earnings on your final paycheck.
Box 2: This is how much federal income tax was withheld from your paychecks throughout the year and should match "Federal Withholding Tax" on your final 2011 paycheck.
Box 3: These are your wages that are subject to Social Security tax. This is generally your wages minus all of your pre-tax benefits (except retirement) up to a maximum of $106,800. If you made more than $106,800 or had any pre-tax benefits, this will not match your year-to-date earnings on your final 2011 paycheck.
Box 4: This is how much Social Security tax was withheld from your paycheck and should match "Social Security" on your final 2011 paycheck.
Box 5: These are your wages that are subject to Medicare taxes. This is generally your wages minus all of your pre-tax benefits (except retirement/Def Compensation deduction). There is no limit on the amount taxed for Medicare. If you had any pre-tax benefits this will not match your year-to-date earnings on your final paycheck.
Box 6: This is how much Medicare tax was withheld from your paycheck and should match "Medicare" on your final 2011 paycheck.
Box 10: This is the amount that you contributed to the flexible spending account for dependent care (daycare). It should match the "dependent care reimbursement" amount on your final 2011 check.
Box 12C: Cost of group term life insurance over $50,000, included in boxes 1, 3, 5, and 16.
Box 12G: This is how much you contributed to your 457b retirement plan on a tax-deferred basis and should match your pre-tax 457(b) contributions on your final 2011 paycheck.
Box 15: This shows that state to whom we submitted state income tax (normally Maryland.)
Box 16: This shows your state taxable wages. This should match Box 1.
Box 17: This shows how much state income tax was withheld. It should match your state and local tax withholding on your final 2011 paycheck.

Is there anything I can do now that will help me next year at tax time so I won't owe money like I did this year?

You may want to have more federal or state tax withheld out of each check. Tax forms are available in Payroll or online. You may still end up owing next year if you do not withhold enough throughout this year.

You may also want to make sure you are contributing the maximum that you can afford to the retirement plan. This will lower your taxable income. The 2012 contribution limits is $17,000. If you are 50 years or older, you may also be eligible to make “catch up” contributions in addition to your regular contributions. The 2011 Catch-Up contribution limits is $5,500.

For more information about taxes please visit the IRS website at www.irs.gov.