Why are my taxable social security wages on line 5a not included in the total wages on line 2?
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RE: My 941 shows $8000 on line 2 (and it should be 10,000) and $2000 on line 5a (which is correct). It is calculating the SS wages correctly, but not the TOTAL wages. How can I correct this?
From this description, I'm not sure how you have set this up to work:
- All earnings items (Hourly, Salary, Bonus, and Commission) are included in Box 2 and are taxable for SS, so they'll also be included in Box 5.
- Are you using non-earnings items for all of the earnings?
Based on your details, the problem is the item tracking the $2000 of earnings marked taxable for SS. I suspect it is not using a tax tracking type that is included in Box 2 (or in Box 1 of your W-2, when it comes time for that.) What tax tracking type does that item use?
I suspect it should be tracked simply as "Compensation" or similar, which would then add it to Box 2.
Hard to answer, but note the two boxes are calculated in very different ways. Box 2 is the sum of the amounts of the payroll items that have various tax tracking types that equate to "Compensation", per the instructions.
Bot 5a is the wages, the wage base that SS was calculated on. Most any type of Addition or Deduction and even a company contribution can be set to increase or decrease SS wage base by making it taxable (checking the little box next to the SS items when editing the item). This is true whether or not the item is of a tax tracking type that will be included in Box 2.
So, if they're different and they shouldn't be (sometimes they should be, rarely) then the trick is to figure out which items are included in one of the boxes and not the other. To do this, focus on additions and deductions (because earnings items will always be included in both boxes). Note also that "included" doesn't always mean "increases" the box, because deductions can be included, when whey they are they'll reduce the box.
When reviewing the items, make sure that only items that should impact SS are doing so / have the little check box checked on the taxability slide.
To further explain my situation here's an example: The company (church) has $10,000 wages. All wages are subject to Federal Income Tax. Of those wages, $8000 are NOT subject to SS and $2000 wages ARE subject to SS. My 941 shows $8000 on line 2 (and it should be 10,000) and $2000 on line 5a (which is correct). It is calculating the SS wages correctly, but not the TOTAL wages. How can I correct this?
RE: My 941 shows $8000 on line 2 (and it should be 10,000) and $2000 on line 5a (which is correct). It is calculating the SS wages correctly, but not the TOTAL wages. How can I correct this?
From this description, I'm not sure how you have set this up to work:
- All earnings items (Hourly, Salary, Bonus, and Commission) are included in Box 2 and are taxable for SS, so they'll also be included in Box 5.
- Are you using non-earnings items for all of the earnings?
Based on your details, the problem is the item tracking the $2000 of earnings marked taxable for SS. I suspect it is not using a tax tracking type that is included in Box 2 (or in Box 1 of your W-2, when it comes time for that.) What tax tracking type does that item use?
I suspect it should be tracked simply as "Compensation" or similar, which would then add it to Box 2.
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