The Details of a Paycheck
When you look at your paycheck, do you understand all the items listed? Here you will find paycheck explanations and tips.
1) Employer name and address: This information will be required when preparing/efiling an income tax return and should match the W-2.
2) Payment period: This should match the information on your W-2 from this employer.
3) Employer name: Please check this and compare it with the information on your W-2.
4) Your filing status: It's important this is correct and matches your filing status on your W-2 and income tax return.
5) Your pay rate: Verify that you actually get paid what you negotiated with your employer.
6) Federal Income Taxes: You control the tax withholdings via the W-4 form. In order for you to meet your tax goals, you can review and verify your W-4 here on taxpert.com. Not only can you see how different allowances would impact your tax withholdings, you can see the impact in your next income tax return. The same is true for your State Income Taxes. Generally, you can reflect the allowances on your federal W-4 on your state W-4.
7) Social Security Tax and Medicare: This is based on a calculation over which you have no influence. Check your contributions to your health, dental plan and retirement contribution so they match your health or retirement plan.
8) Net Pay: Obviously, your net pay will be the result of points 6 and 7. Thus, it's critical you optimize your tax withholdings so you either increase your net pay and your tax refund/liability will adjust accordingly.
Contact one of our Taxperts if you have questions about your paycheck.