Over the next few weeks, as your employees start to receive their 2025 W-2 form, they will likely have questions as to what all those numbers mean. For example, it is not uncommon for a salaried employee who earns a salary of “$50,000” per year question why their Box 1 Wages only reflects $45,000. Did they get underpaid? Probably not. If the employee contributes to a pension plan (aka 401(k)) or has pre-tax insurance deductions, then those amounts reduces the “taxable” wage, which is what is represented in Box 1. Some employees may also wonder why their Federal Income Tax…
Posts tagged as “Social Security Administration”
The Social Security Administration has announced that they will begin mailing Educational Correspondence (EDCOR) notices in the middle of next year to businesses and employers who submit wage and tax statements (Form W-2) that contain name and Social Security number (SSN) combinations that do not match their records. There are a number of reasons why reported names and SSNs may not agree with their records, such as typographical errors, unreported name changes, and inaccurate or incomplete employer records. If they cannot match the name and SSN reported on a Form W-2 to their records, they cannot reconcile employer wage reports and…