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Category: Tax
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Experience:  CPA with tax experience.
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How can box three be more than box one on W2?

Resolved Question:

I just received my W-2; how can box 3 (social security wages) be more than box 1 (wages, tips, compensation)?

Thank you

Submitted: 5 years ago.
Category: Tax
Expert:  JKCPA replied 5 years ago.

Thanks for your question.

The wages in Box 1 are frequently less than Box 3 of the W-2 form. This can be due to many different pre-tax payroll deductions you were given by your employer such as 401k contributions, health insurance premiums, etc. This gives you the benefit of having to report only the lower Box 1 wage amount as taxable wages on your income tax return.

Best regards

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