What taxation information is shown on a W-2? Does it include FICA, federal income tax, and state income tax?

Thanks for that breakdown! I'm looking at my W-2 right now and notice there's also a Box 3 that shows "Social Security wages" and Box 5 that shows "Medicare wages." How are these different from the tax amounts in Boxes 4 and 6? Are those the amounts my employer calculated the taxes on?

You're exactly right! Boxes 3 and 5 show the wage bases used to calculate your Social Security and Medicare taxes. Box 3 (Social Security wages) might be lower than your total wages if you earned above the Social Security wage base limit ($168,600 for 2025), since Social Security tax isn't collected on earnings above that threshold. Box 5 (Medicare wages) typically matches your total wages because there's no upper limit on Medicare tax. However, there are some pre-tax deductions like health insurance premiums that might make these numbers different from your total wages in Box 1. Your employer uses these amounts to calculate the actual taxes withheld in Boxes 4 and 6.

That sounds useful. Does it actually explain what all the boxes mean or just give you the total amounts? I'm particularly confused about why my Box 1 wages are lower than my Box 3 and Box 5 wages. Would it help with something like that?

Hmm, sounds like another tax prep ad. How much does this service cost? I'm always skeptical when people randomly recommend products that seem too good to be true.

It actually breaks down every box with explanations of what they mean and why they might be different from each other. For your specific question about Box 1 being lower than Boxes 3 and 5, it would tell you that's typically because of pre-tax deductions like 401(k) contributions or health insurance premiums that reduce your taxable income for federal income tax purposes but not necessarily for Social Security and Medicare calculations. I understand the skepticism! I felt the same way at first. They have a free tier that lets you analyze basic documents like W-2s and 1099s, which is what I started with. There are premium features for more complex tax situations, but the basic service that answers questions like the original post is completely free.

They use an automated system that navigates the IRS phone tree and waits on hold for you. When they reach a real person, they call you and connect you directly to the IRS agent. It's basically like having someone wait on hold for you instead of doing it yourself. Completely understand the skepticism - I felt the same way! But it's not about "cutting the line" or anything shady. The IRS wait times are the same, but you're not the one sitting there listening to hold music for hours. They do the waiting, then call you when they reach a human. I was doubtful too until I tried it.

Wait, how does this actually work? Do they just call the IRS for you? I'm confused how a third-party service could get you through faster than calling directly.

Yeah right. Nothing gets you through to the IRS faster. They're deliberately understaffed and overwhelmed. This sounds like a scam to get desperate people's money when they're already stressed about tax problems.

They use an automated system that navigates the IRS phone tree and waits on hold for you. When they reach a real person, they call you and connect you directly to the IRS agent. It's basically like having someone wait on hold for you instead of doing it yourself. Completely understand the skepticism - I felt the same way! But it's not about "cutting the line" or anything shady. The IRS wait times are the same, but you're not the one sitting there listening to hold music

This is so important to mention! I got hit with a huge tax bill plus penalties when I switched from W-2 to 1099 work because nobody told me about quarterly estimated payments. Do you happen to know if there's any way to see FICA taxes on 1099 income? Or is that just calculated differently?

With 1099 income, you don't see FICA taxes listed anywhere because nothing is being withheld. Instead, you pay what's called "self-employment tax" which is essentially both the employee AND employer portions of FICA (Social Security and Medicare). That's why it feels so much higher - you're paying both halves! You calculate this on Schedule SE when you file your taxes. For 2025, it's approximately 15.3% of your net earnings (compared to the 7.65% employees pay on W-2 income). So it's not only calculated differently, but it's also a higher percentage. The good news is you can deduct half of your self-employment tax on your 1040, which helps offset the higher rate a little bit.

Code DD in Box 12 shows the cost of employer-sponsored health coverage. It's for informational purposes only and isn't taxable income. The Affordable Care Act requires employers to report this value, but it doesn't affect your tax liability at all. You don't need to do anything with this number when filing your taxes - it's just letting you know the total value of the health insurance your employer provided.

That makes sense, thanks for explaining! Was worried I missed something important I needed to report. Seems like there's so many random codes and numbers on these forms that don't actually matter for filing. Wish they'd simplify this stuff.

This is super helpful, especially the point about pre-tax deductions! I was wondering why my Box 1 wages were different from what I calculated from my paystubs. I contribute to a 401(k) and have health insurance premiums deducted, so that explains the difference. The IRS link you shared is great too - I bookmarked it for future reference. Thanks for taking the time to explain this in such detail!

This breakdown is exactly what I needed! I've been staring at my W-2 for weeks trying to figure out why all the wage boxes had different amounts. Your explanation about pre-tax benefits affecting different calculations makes perfect sense now. I have both 401(k) contributions and health insurance premiums coming out pre-tax, so that's why my Box 1 is lower than boxes 3 and 5. It's actually reassuring to know this is normal and not some kind of error. Thanks for explaining it in such clear terms!