Vision Payroll

December 28, 2010

2010 Form W-2 Tips, Part 2, Box 1 Wages, Tips, Other Compensation

2010 Form W-2 Tips, Part 2, Box 1 Wages, Tips, Other Compensation
2010 Form W-2 Tips, Part 2, Box 1 Wages, Tips, Other Compensation
This is one in a continuing series on the 2010 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than January 31, 2011. Forms mailed on the due date are considered furnished if properly addressed. Employers unable to meet that deadline may file a request for extension of time to furnish the forms. Today we review Box 1, wages, tips, other compensation.

Box 1 May Include Several Adjustments To Gross Wages

Box 1 shows the amount employees must enter on line 7 of Form 1040, US Individual Income Tax Return. It may be, but is not necessarily, equal to gross wages. Common adjustments that increase or decrease gross wages include the following:

  • Employee elective deferral to qualified retirement plans such as §401(k) plans, SIMPLE plans, and §403(b) plans (decrease).
  • Amounts withheld for non-taxable benefits elected under §125 plans (decrease).
  • Taxable non-cash fringe benefits, such as personal use of company automobile (increase).
  • Certain clergy housing allowances (decrease).
  • Reported tips (increase).
  • Expense reimbursements paid under a non-accountable plan (increase).
  • Accident and health insurance premiums for so-called 2% S corporation shareholders (increase).
  • Cost of group-term life insurance in excess of $50,000 (increase).

Box 2, Federal Income Tax Withheld Is the Next Topic

The next topic in this continuing series will be Box 2, federal income tax withheld. Contact Vision Payroll with any questions on the 2010 Form W-2.

October 31, 2010

IRS Announces 401(k), 403(b), and 457(e)(15) Deferral Limits for 2011

IRS Announces 401(k), 403(b), and 457(e)(15) Deferral Limits for 2011
IRS Announces 401(k), 403(b), and 457(e)(15) Deferral Limits for 2011
In IR-2010-108, the Internal Revenue Service (IRS) announced the limits on deferral contributions for 2011 under §401(k), §403(b), and §457(e)(15). These limitations are codified in those sections of the Internal Revenue Code of 1986 (IRC). Under IRC §415, the Commissioner of the IRS is required to adjust the plan limitations to keep pace with inflation.

2011 Contribution Limits Remains Unchanged

For 2011, the deferral contribution limitation will remain at $16,500. The age 50 and over catch-up contribution will remain at $5,500 for 2011 for individuals who plan to reach age 50 before the end of 2011.

Contact Vision Payroll for More Information on 2011 Retirement Plan Changes

Contact Vision Payroll if you have questions on changes to the 2011 Retirement Plan Contribution and Compensation Limitations or get further information at Important Facts and Figures.

December 28, 2009

2009 Form W-2 Tips, Part 2, Box 1 Wages, Tips, Other Compensation

This is one in a continuing series on the 2009 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than February 1, 2010. Forms mailed on the due date are considered furnished if properly addressed. Employers unable to meet that deadline may file a request for extension of time to furnish the forms. Today we review Box 1, wages, tips, other compensation.

Box 1 shows the amount employees must enter on line 7 of Form 1040, US Individual Income Tax Return. It may be, but is not necessarily, equal to gross wages. Common adjustments that increase or decrease gross wages include the following:

  • Employee elective deferral to qualified retirement plans such as §401(k) plans, SIMPLE plans, and §403(b) plans (decrease).
  • Amounts withheld for non-taxable benefits elected under §125 plans (decrease).
  • Taxable non-cash fringe benefits, such as personal use of company automobile (increase).
  • Certain clergy housing allowances (decrease).
  • Reported tips (increase).
  • Expense reimbursements paid under a non-accountable plan (increase).
  • Accident and health insurance premiums for so-called 2% S corporation shareholders (increase).
  • Cost of group-term life insurance in excess of $50,000 (increase).

The next topic in this continuing series will be Box 2, federal income tax withheld. Contact Vision Payroll with any questions on the 2009 Form W-2.

December 21, 2008

2008 Form W-2 Tips, Part 2, Box 1 Wages, Tips, Other Compensation

This is one in a continuing series on the 2008 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than February 2, 2009. Forms mailed on the due date are considered furnished if properly addressed. Employers unable to meet that deadline may file a request for extension of time to furnish the forms. Today we review Box 1, wages, tips, other compensation.

Box 1 shows the amount employees must enter on line 7 of Form 1040, US Individual Income Tax Return. It may be, but is not necessarily, equal to gross wages. Common adjustments that increase or decrease gross wages include the following:

  • Employee elective deferral to qualified retirement plans such as §401(k) plans, SIMPLE plans, and §403(b) plans (decrease).
  • Amounts withheld for non-taxable benefits elected under §125 plans (decrease).
  • Taxable non-cash fringe benefits, such as personal use of company automobile (increase).
  • Certain clergy housing allowances (decrease).
  • Reported tips (increase).
  • Expense reimbursements paid under a non-accountable plan (increase).
  • Accident and health insurance premiums for so-called 2% S corporation shareholders (increase).
  • Cost of group-term life insurance in excess of $50,000 (increase).

The next topic in this continuing series will be Box 2, federal income tax withheld. Contact Vision Payroll with any questions on 2008 Form W-2.

October 20, 2008

IRS Announces Increases to 401(k), 403(b), and 457(e)(15) Deferral Limits for 2009

In IR-2008-118, the Internal Revenue Service (IRS) announced increases to the limits on deferral contributions for 2009 under §401(k), §403(b), and §457(e)(15). These limitations are codified in those sections of the Internal Revenue Code of 1986 (IRC). Under IRC §415, the Commissioner of the IRS is required to adjust the plan limitations to keep pace with inflation. For 2009, the deferral contribution limitation will increase from $15,500 for 2008 to $16,500 for 2009. The age 50 and over catch-up contribution will also increase from $5,000 for 2008 to $5,500 for 2009 for individuals who plan to reach age 50 before the end of 2009. Contact Vision Payroll if you have questions on changes to these deferral contribution limits.

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