Five W-2 Tips to Put More Money in Your Pocket
SAN ANTONIO, Jan. 30, 2013 /PRNewswire/ -- It's tax season and soon you'll receive one of the most important tax forms of the year, Form W-2, Wage and Tax Statement. Your 2012 income taxes and future social security benefits are based on this form, so its accuracy is essential to both your short- and long-term financial health.
The American Payroll Association, the nation's leader in payroll education, offers tips to get the most from your Form W-2.
1. Verify you receive all your W-2s. You should receive a Form W-2 from every company you worked for in 2012 by January 31. If any one of the companies does not send one, contact its payroll department and request a 'reissued statement'.
If you earned $600 or more from a single company for freelance or contract work, you should receive Form 1099-MISC, Miscellaneous Income, instead of Form W-2.
2. Check for tax credits. You may qualify for thousands of dollars in tax credits, including the Earned Income Tax Credit. Read the back of Form W-2 copy B to determine your eligibility.
3. Review your Form W-2 against your final 2012 paystub. If any of the figures seem incorrect, notify your payroll department.
Important items to review on Form W-2:
A. Box 1 may differ from your final 2012 paystub year-to-date gross pay if you participated in a 401(k) or other employer-sponsored savings plan.
B. The Box 3 total should not exceed $110,100 – the 2012 social security wage base.
C. Boxes 1, 3, and 5 may be different from your final 2012 paystub year-to-date gross pay if you use pre-tax dollars to pay health insurance premiums, transit benefits, or to contribute to flexible spending accounts.
4. Verify your Social Security Number (SSN) matches your social security card.
The name and SSN on Form W-2 must match your social security card in order for you to receive your benefits. Ask your payroll department for a corrected Form W-2, if needed.
5. Increase your take home pay. The average person overpays their taxes by nearly $250 a month. Adjust your Form W-4 to more closely match your tax liability. You could increase the money you receive in each paycheck.
For additional tips visit www.nationalpayrollweek.com.
SOURCE American Payroll Association