How to calculate taxable wages [Box 1 on W-2]

TaxGross Pay  –   nontaxable wages [ HSA, Medical premium, Dental premium, uniform allowance]  –    Tax deferred wages [ Traditional retirement plan]


Gross pay     3,000

Non taxable wages      200 [HSA]  + 150 [Medical] +   50 [ Dental] + 10 [ Uniform allowance]

Tax-deferred wages   500   [ 401 K ]

So your Taxable wages =  3000-200-150-50-10-500

The final number          3,000 – 910  =  2,090 

The next step is to calculate your AGI or Adjusted gross income…   A lot of tax saving tricks are based on this number such as eligibility to contribute to traditional IRA.

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