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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29569
Experience:  Taxes, Immigration, Labor Relations
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My software uses the adjusted gross wages reports and W-2

Customer Question

My software uses the adjusted gross wages for all reports and W-2 forms. this is the amount after the pre-tax deduction. Is this correct or should we use the total gross pay before deductions for line these forms.
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

That doesn't look correct...

Expert:  Lev replied 1 year ago.

Gross TAXABLE wages are determined as gross wages minus pre-tax deduction.
In additional gross taxable wages are SEPARATELY calculated for federal income tax purposes, for social security tax purposes and for Medicare tax purposes.

That is because of different pre-tax deduction rules for each of these taxes.

For tax treatment of specific items - see IRS publication 15 - (Circular E), Employer's Tax Guide

page 36 - 15. Special Rules for Various Types of Services and Payments

As we see - different columns are for different tax types.