You need to prepare your annual tax returns every year, and you need the information from your W-2 to prepare your tax returns. 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. The paystub will have details of your pay for each period, the year to date payroll, the taxes and deductions that have been taken out of your total earnings, and the amount that you will get from the paycheck. A final paystub shows the details of the gross and net income that you have made 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. The gross income is the total amount of money that you will have and without deductions and taxes. The paystub booths at https://www.paystubcreator.net/blog/how-to/how-to-calculate-w-2-wages-from-a-paystub show this amount, which for a large number of people will be the product of the hourly rate and the number of hours that one works in a week. The amount will also include any income from commissions, bonuses, and overtime hours.
The next step will be to subtract nontaxable wages from 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. Such wages can include disability wages, employer insurance, gifts, and partnership income among others.
Next, you will need to account for other deductions. Various things that can be included here are life insurance, health insurance, retirement accounts, and employer benefits among 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. Know more about paystubs at https://www.dictionary.com/browse/wages.
The next thing that you will do is to determine your annual taxes. You will need to find out the amount of local, state, and income taxes which are withheld from your earnings. You will then multiply these numbers by the number of times that you get paid each year. What you get will be the amount of taxes to be withheld from your earnings at the end of the 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. Start now!