Wow, I think you just solved it! I just checked my W2 again and Box 12 with code D shows $7,200, and there's another $800 or so in health insurance premiums that were pre-tax. That pretty much accounts for the entire "missing" amount. I feel kind of silly now, but I really appreciate everyone's help. My coworker is checking hers too to see if that explains her situation. Is this something I should have known? I've had this job for three years but never noticed this before.

Don't feel silly at all! This is a very common confusion that happens to lots of people. The W2 doesn't exactly make it obvious that Box 1 isn't your total earnings but rather your taxable wages after certain pre-tax deductions. It's actually good news - those retirement contributions are lowering your taxable income now while helping you save for the future. Your full salary is still reflected elsewhere on the W2 (like in Box 3 and Box 5 for Social Security and Medicare wages, though these might also have some differences based on other pre-tax items). This is exactly why it's always good to check your final paystub against your W2 when you get it each year. Glad we could help solve the mystery!

The money isn't really "missing" - it's just reported differently depending on what it is. Pre-tax deductions like 401(k) contributions appear in Box 12 with various codes. Health insurance premiums aren't explicitly shown on the W2 in most cases. Box 1 shows "taxable wages" - what you're actually taxed on after certain pre-tax items are subtracted. Box 3 shows your wages subject to Social Security tax (might be different from Box 1). Box 5 shows wages subject to Medicare tax (often matches Box 3). If you add Box 1 + any pre-tax deductions (retirement, some health insurance, HSA, etc.), you should get close to your actual gross pay. The system is confusing, but it's working as designed!

This is good advice but I think it matters way less when you win millions lol. Like how much would someone need to lose to make a dent in a $2.7M win? Probably more than most people's annual salary 😂

I second this! The transcript was the only way I found out my refund was delayed because they needed to verify my W-2 with my employer. The WMR tool just said "processing" for weeks but the transcript showed exactly what was happening.

I filed electronically for both federal and state. My state refund (about $430) actually came through about a week ago, which makes the federal delay even more annoying! I don't understand why the state can process it so quickly but the federal is taking forever.

That's a great point I hadn't considered! So even though I don't need to file taxes for these small amounts now, I should be keeping detailed records of all transactions for future basis calculations? Does your brokerage help with this or do you need to track it separately?

Most brokerages now track cost basis for acquisitions after 2011, so you'll have records available in their systems. However, I still recommend keeping your own spreadsheet or file with annual statements. This is especially important for dividend reinvestments which create tiny new tax lots every time they occur. While the brokerage tracks these, having your own backup documentation is valuable. Also, if you ever switch brokerages or when the account eventually transfers to your child, having your own complete history makes everything much smoother. Think of it as an insurance policy against future tax headaches!

Wow, I hadn't even thought about state taxes being different! I'm in Illinois - does anyone know what the threshold is here for custodial accounts and kiddie tax?

I don't know Illinois specifically, but many states either follow the federal guidelines or have their own thresholds. Your best bet is to check the Illinois Department of Revenue website or call them directly. Another option is to look at your tax software if you use any - most good tax software will alert you to state-specific filing requirements for dependents when you input their information. That's actually how I discovered the NJ requirement after initially missing it. Don't assume state and federal rules align, as that was the mistake I made!

Thanks for mentioning this! I notice there's also a section for "Fed MWT" with its own YTD column. I'm guessing that's federal withholding, right? Is that something we should be paying close attention to?

Yes, "Fed MWT" stands for Federal Mandatory Withholding Tax (sometimes just called federal income tax withholding). This is definitely something you should monitor carefully! This represents the federal income tax being withheld from each paycheck and sent to the IRS on your behalf. The YTD total for this column shows how much has been withheld for federal taxes so far this year. When you file your tax return, this amount will be compared against your actual tax liability to determine if you get a refund or owe additional taxes. If the YTD withholding seems too high or too low based on your expected tax situation, you can adjust it by submitting a new W-4 form to your husband's employer.

And Social Security has that annual wage base limit too ($160,200 for 2023, will be different for 2025), so once you hit that in the YTD earnings, you should stop seeing Social Security tax taken out of the remaining paychecks for the year. Medicare doesn't have a cap though.