DISCLAIMER: I am a CPA, but I am not your CPA. This article is for informational purposes only and is not tax or legal advice, nor can be relied upon as such. The author is not liable for any losses related to actions or failure to act related to the content of this article. If you need specific tax advice consult with a CPA who specializes in your subject matter and taxing jurisdiction.
Last week’s episode of the Back Pocket Accountant Podcast began the process of translating your W2. Click here to listen to last week’s episode.
In today’s episode I will cover Part 2 of “Translating your W2”.
Listen to the Podcast
Links & Resources
Publication 17: Your Federal Income Tax
Savers Credit – Form 8880“Credit for Qualified Retirement Savings Contributions”
o Maximum Income to Qualify for the Credit:
$64,000 Married Filing Jointly
$48,000 Head of Household
$32,000 All other taxpayer
Box 12 Codes as listed in the 2019 W2 Instructions
A - Uncollected Social Security or RRTA tax on tips. Include this tax on Form 1040.
B – Uncollected Medicare tax on tips. Include this tax on Form 1040.
C – Taxable cost of group-term life insurance over $50,000 – included in boxes 1, 3 (up to social security wage base), and 5.
D – Elective deferrals to a section 401(k) cash or deferred arrangement. Also includes deferrals under a SIMPLE retirement account that is part of a section 401(k) arrangement.
E - Elective deferrals under a section 403(b) salary reduction agreement.
F – Elective deferrals under a section 408(k)(6) salary reduction SEP
G – Elective deferrals to a section 457(b) deferred compensation plan.
H – Elective deferrals to a section 501(c)(18)(D) tax-exempt organization plan. See the Form 1040 instructions for how to deduct.
J – Nontaxable sick pay (information only not included in boxes 1,3, or 5)
K – 20% excise tax on excess golden parachute payments.
L – Substantiated employee business expense reimbursements (nontaxable)
M – Uncollected Social Security or RRTA tax on taxable cost of group-term life insurance over $50,000 (former employees only)
N – Uncollected Medicare tax on taxable cost of group-term life insurance over $50,000 (former employees only)
P – Excludable moving expense reimbursements paid directly to a member of the U.S. Armed Forces (not included in boxes 1, 3, or 5)
Q – Nontaxable combat pay. See the instructions for Form 1040 for details on reporting this amount.
R – Employer contributions to an Archer MSA. Report on Form 8853, Archer MSAs and Long-Term Care Insurance Contracts
S – Employee salary reduction contributions under a section 408(p) SIMPLE plan (not included in box 1).
T – Adoption benefits (not included in box 1). Complete Form 8839, Qualified Adoption Expenses, to compute any taxable and nontaxable amounts.
V – Income from exercise of nonstatutory stock option(s) – included in boxes 1, 3 (up to Social Security wage base), and 5.
W – Employer contributions – including amounts the employee elected to contribute under a section 125 (cafeteria) plan – to your health savings account. Report on Form 8889, Health Savings Accounts (HSAs)
Y – Deferrals under a section 409A nonqualified deferred compensation plan.
Z – Income under a nonqualified deferred compensation plan that fails to satisfy section 409A. This amount is also included in box 1. It is subject to an additional 20% tax plus interest.
AA – Designated Roth contributions under a section 401(k) plan.
BB – Designated Roth contributions under a section 403(b) plan.
DD – Cost of employer-sponsored health coverage. The amount reported with Code DD is not taxable.
EE - Designated Roth contributions under a governmental section 457(b) plan. This amount does not apply to contributions under a tax-exempt organization section 457(b) plan.
FF – Permitted benefits under a qualified small employer health reimbursement arrangement.
GG – Income from qualified equity grants under section 83(i)
HH – Aggregate deferrals under section 83(i) elections as of the close of the calendar year.