SAN ANTONIO, Feb. 3, 2014 /PRNewswire/ -- January 31 was the date for employers to provide Form W-2, Wage and Tax Statement to their employees – in person, electronically, or by mail. Income tax returns and future social security benefits are based on this form so its accuracy is essential.
The American Payroll Association, the nation's leader in payroll education, has five tips for getting the most out of your W-2.
1. Verify you have received all of your W-2s. You should receive a W-2 form from every organization you received compensation from during 2013. If you do not receive one by early February, contact the company's 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 and will be responsible for all taxes on that income.
2. Verify your name and Social Security Number (SSN) match 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 social security benefits. Ask your payroll department for a corrected Form W-2, if needed.
3. Review your Form W-2 against your final 2013 paystub. Contact your payroll department immediately if there are any discrepancies.
Important items to review on Form W-2:
A. The amount in Box 1 is likely to be smaller than your final 2013 paystub year-to-date gross pay if you participated in a 401(k) or other employer-sponsored retirement savings plan.
B. The Box 3 total should not exceed $113,700 – the 2013 social security wage base.
C. It is likely that Boxes 1, 3, and 5 will be smaller than your final 2013 paystub year-to-date gross pay if you used pre-tax dollars to pay insurance premiums, or to contribute to flexible spending accounts.
4. Check for tax credits. Depending on your eligibility, you may qualify for thousands of dollars from the Earned Income Tax Credit. Read the back of Form W-2 copies B, C, and 2 to determine your eligibility.
5. Give yourself an instant raise! 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 and resources or to download the Paycheck Maximizer app, visit www.nationalpayrollweek.com.
SOURCE American Payroll Association