You are required to submit your tax returns annually, and you need info from your W-2 form to make the tax return. If you do not have your W-2 yet, you can get the same information that will be on your W-2 from one of your pay stubs. Your pay stub is the paycheck that employer gives it every time they pay you. Some of the details that you will find in the paystub include your pay for each pay period and the year to date payroll, deductions and taxes that have been taken out of your total earnings, and your net earnings. You also get a final paystub by the end of the year which shows the gross and net income earned throughout the year. The W-2 form, on the other hand, is a tax form which shows the amount of taxes that have been taken from your paycheck during the year. Learn how to calculate your W-2 wages from a paystub in this article.
Finding your gross income will be the first step that you take. Your gross income is all the money that you have made that year without the tax withholdings and deductions. You have this amount on your paystub, which for many people is an hourly rate multiplied by the number of hours that they work in a week. The amount will also include any income from commissions, bonuses, and overtime hours.
After this, you will need to subtract nontaxable wages out of the gross income. The nontaxable wages will be comprised of the wages you received that you do not have any state, federal, or income taxes. The nontaxable wages can include such things as partnership income, gifts, employer insurance, and disability wages among others.
The other thing to do is to account for other deductions which will reduce your amount of taxable income. Some of the things that might be included in such a category include employer benefits, life insurance, health insurance, retirement accounts, transportation programs, and others. You will subtract the sum of these deductions from what you got in the second step. The result will be a taxable income for that year.
The next thing that you will do is to determine your annual taxes. Find out what amount of state, local, and income taxes on your paystub which are withheld from your earnings. After that, you’ll get the product of the numbers with the number of times that you are paid per year. The number that you get will be the total amount of taxes that will be withheld from your earnings that year.
Your last step will be deducting the total taxes that will be withheld from your income from the number that you calculated in step three. This will represent your W-2 earnings already or net income for the year.