Why is Box 5 bigger than Box 1 on my W2? Something wrong?

This is actually pretty common and usually not a mistake! Box 1 shows your taxable wages for federal income tax purposes, while Box 5 shows your Medicare wages. They can differ for several legitimate reasons: The most common reason is pre-tax deductions like traditional 401(k) contributions, health insurance premiums, or FSA contributions. These reduce your Box 1 amount but don't reduce your Box 5 amount since you still pay Medicare tax on those dollars. For example, if you contributed $5,800 to a 401(k) this year but didn't last year, that would explain the exact difference you're seeing. Or maybe you increased your health insurance coverage or started contributing to an FSA. Look at your final paystub of the year and check for pre-tax deductions - the total should approximately match the difference between Box 1 and Box 5.

I had the exact same issue last year and was totally confused until I used taxr.ai to analyze my W2. It actually scans your tax forms, explains each box in plain English, and tells you if the numbers make sense together. https://taxr.ai saved me from making an unnecessary call to HR. In my case, it immediately identified that the difference was because I had started maxing out my 401(k) contributions that year. The tool even pointed out that this was beneficial for my tax situation and explained why Box 5 being higher than Box 1 was completely normal. Super helpful when you're trying to understand these tax form quirks!

I want to follow up about my experience with taxr.ai after trying it - surprisingly good! I uploaded my W2 where Box 5 was $6,240 higher than Box 1, and it immediately broke down why: $4,500 in 401k contributions, $1,450 in health insurance premiums, and $290 in dental/vision that were all pre-tax deductions. The analysis matched my paystub perfectly and explained why this reduces federal tax but not Medicare tax. Definitely cleared up my confusion and confirmed everything was correct on my W2. The visual breakdown of each box and what affects the numbers was really educational too.

If your employer made a mistake on your W2, getting them to fix it can be a complete nightmare. I spent WEEKS trying to reach someone at my company's payroll department last year. After giving up on email, I tried calling the IRS directly to ask what to do, but couldn't get through to anyone. Then I found https://claimyr.com and it completely changed the game. They got me connected to a real IRS agent in about 20 minutes when I'd been trying for days. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed I needed a corrected W2 from my employer and gave me steps to take if the company wouldn't provide one. Having that official guidance made all the difference when I went back to HR.

I need to apologize for my skepticism about Claimyr and admit I was completely wrong. After my frustrated comment, I decided to try it anyway since I was at my wit's end with a tax notice issue. I got connected to an actual IRS agent in about 15 minutes yesterday. The agent confirmed that my Box 5/Box 1 difference was normal due to pre-tax deductions and cleared up some other questions I had about reporting a 401k rollover. Saved me hours of stress and hold music. For anyone struggling to get IRS help during tax season, it's definitely worth it. Never thought I'd be recommending a service I called a scam, but here we are.

I'm an HR coordinator and see this question all the time! Here's a simplified breakdown of what typically causes Box 5 to be higher than Box 1: Box 1 (Wages, tips, other compensation) = Gross wages MINUS pre-tax deductions like: - 401(k)/403(b) contributions - Health insurance premiums - FSA/HSA contributions - Commuter benefits Box 5 (Medicare wages and tips) = Gross wages with FEWER deductions taken out So if your Box 5 is $5,800 higher, it means you had about $5,800 in deductions that reduce federal income tax but not Medicare tax.

Does anyone know if state taxes follow Box 1 or Box 5 numbers? My state tax seems higher than it should be and I'm wondering if they're calculating based on the Box 5 amount instead of Box 1.

This is a great question and totally understandable confusion! As others have mentioned, the difference between Box 1 and Box 5 is usually due to pre-tax deductions. Since you mentioned this is the first year you've seen this difference, it sounds like you may have started or increased contributions to things like a 401(k), health insurance, or flexible spending account. To verify everything is correct, I'd recommend checking your final paystub from December 2024. Look for any "pre-tax" deductions and add them up - that total should roughly match the $5,800 difference between your boxes. Common culprits are: - Traditional 401(k) contributions (very common if you got a raise and decided to save more) - Health/dental/vision insurance premiums - Flexible Spending Account (FSA) or Health Savings Account (HSA) contributions - Dependent care assistance If the math doesn't add up or you can't find deductions that explain the difference, then it would be worth contacting HR. But in most cases, this difference is completely normal and actually beneficial since those pre-tax deductions reduce your federal income tax liability!

I just wanted to add that this exact scenario happened to me two years ago when I started contributing to an HSA for the first time. The $3,000 annual HSA contribution I made showed up as the difference between Box 1 and Box 5, and I panicked thinking my employer made an error. What helped me understand it was realizing that HSA contributions are "triple tax advantaged" - they reduce your federal income tax (hence lower Box 1), but you still pay Medicare tax on that income (hence it stays in Box 5). Same principle applies to traditional 401(k) contributions and most other pre-tax benefits. If you started any new benefits this year or increased existing contributions, that's almost certainly what you're seeing. The good news is this difference typically means you're saving money on your federal taxes! Just double-check your final paystub to make sure the pre-tax deductions add up to roughly that $5,800 difference.