"Wait—why do I have **five** different numbers for my pay?"
If that's your reaction when you crack open January's Form W-2, you're not alone. The Wage-and-Tax Statement packs a year's worth of earnings, benefits and withholding into 20-plus little boxes—each one feeding a different line on your tax return. Understanding what every code and dollar means lets you spot payroll errors, fine-tune your W-4 and claim credits you might otherwise miss.
The "Business Card" at the Top (Boxes a–f)
Your Social Security number (Box a) must match the Social Security Administration's database exactly or the IRS will flag your return. Boxes b and c list your employer's EIN and address—handy if you changed jobs and have multiple W-2s. Box d is an internal control number; it never goes on your 1040. Double-check that your legal name and address in Boxes e–f match what's on file with the IRS; a typo can delay your refund. If anything here is wrong, request a corrected Form W-2c before you file.
Where Your Wages Actually Land (Boxes 1–6)
- Box 1 shows taxable federal wages—your gross pay minus pre-tax 401(k), HSA and some insurance premiums.
- Box 2 reports federal income tax already withheld. If this number is huge and you always get a big refund, it may be time to update your W-4.
- Boxes 3 & 5 are Social Security and Medicare wages. They're often higher than Box 1 because many pre-tax deductions still count for FICA taxes.
- Boxes 4 & 6 show the actual Social Security (6.2%) and Medicare (1.45% plus 0.9% on high incomes) that came out of your checks.
- For 2025, Social Security tax stops after $176,100 of wages—check that Box 4 equals 6.2% of the amount in Box 3 up to that limit.
Tips & Service-Industry Quirks (Boxes 7–8)
Box 7 tallies the tips you reported; Box 8 lists "allocated tips" your employer assigned if reported tips looked too low. Allocated tips aren't in Box 1, so you must add them to income on your 1040 or dispute the amount with proper records.
Benefits, Flexible Spending & the Mysterious Codes (Boxes 9–14)
- Box 9 has been blank since the Advance EIC credit died in 2010.
- Box 10 shows dependent-care benefits—up to $5,000 is tax-free; anything above is taxable.
- Box 11 covers distributions from non-qualified deferred-comp plans; these can affect how much of your pay is subject to Social Security tax.
Decoding Box 12
The IRS squeezes dozens of special items into Box 12 using single-letter codes:
| Code | What it Means | Why You Care |
|---|---|---|
| D | 401(k) salary deferrals | Reduces Box 1; could trigger Saver's Credit |
| DD | Employer health-plan cost (info only) | Helps you see true benefits value |
| W | Employer + employee HSA contributions | Extra after-tax deposits may be deductible on Form 8889 |
Box 13 checkmarks reveal whether you're a statutory employee (schedule C), covered by a retirement plan (affects IRA deduction) or received third-party sick pay. Box 14 is your employer's catch-all for items like state disability insurance or union dues—review each entry; some may be deductible.
State & Local Withholding (Boxes 15–20)
These boxes echo the federal section but for each state or locality. Numbers here can differ from Box 1 because states tax items the feds exclude (or vice versa). If you moved to another state mid-year, you might have two complete sets of Boxes 15–20—make sure each return gets the correct copy.
Spotting—and Fixing—Mistakes
- Missing W-2 by mid-February? Contact your employer first, then call the IRS at 800-829-1040 if it still doesn't arrive.
- Wrong wages or withholding? Ask payroll for a W-2c; attach it if you've already filed.
- Multiple W-2s? Enter each separately in your tax software; don't combine boxes yourself.
Big Takeaways
- Boxes 1–6 drive 90% of your federal return—always compare them to your final paystub.
- Box 12 codes hide valuable nuggets like HSA and 401(k) data; decode them before you e-file.
- A single typo in the header can stall your refund for weeks—proofread!
File the slip in your 2025 tax folder (or snap a PDF) and you're ready to tackle the rest of your documents.
Disclaimer: This article is for general education only and isn't individualized tax advice. Consult a qualified professional for guidance on your situation.