are medicare wages the same as gross wages
Report Abuse. 1  If you earn 20k and put 2k in a tax deferred 401k then your gross wages for income tax is 20k minus 2k. Then they take out the fed and state income taxes on 18k. 2  Pre tax contributions to a 401k are exempted from wages for income tax purposes, but not medicare or FICA. You must include all income and withholding from all Forms W-2 you receive on your tax return, and if filing jointly, you must also include all income and withholding from your spouse's Forms W-2. Attach a copy of each Form W-2 to the front of your tax return as indicated in the instructions. To determine the amount of Medicare tax an employee should pay, you must first figure the wages. 1  Determine whether the employee has voluntary pretax deductions. 2  Subtract applicable pretax deductions from the employee's gross pay -- earnings before deductions -- to arrive at Medicare wages. If you earn 20k and put 2k in a tax deferred 401k then your gross wages for income tax is 20k minus 2k. Then they take out the fed and state income taxes on 18k. So you save some. When it comes to medicare wages, etc then they count your whole income of 20k. This gives you the max amount when you retire. This process gives the employee a tax break since it reduces the amount of wages subject to Medicare tax. If the employee has no pretax deductions, her entire gross pay is also her Medicare wages. Calculate Medicare tax at 1.45 percent of the employee's Medicare wages to arrive at the amount of tax to withhold. Notably, the employer pays an equal portion of Medicare tax. One of the most common differences between box 1 and boxes 3 and 5 is the amount of employee contributions to deferred compensation plans such as traditional 401(k) and 457. All wages, salaries and tips you received for performing services as an employee of an employer must be included in your gross income. Amounts withheld for taxes, including but not limited to income tax, social security and Medicare taxes, are considered received and must be included in gross income in the year they're withheld. Box 1 (Wages, Tips and Other Compensation) represents the amount of compensation taxable for federal income tax purposes while box 3 (Social Security Wages) represents the portion taxable for social security purposes and box 5 (Medicare Wages) represents the portion taxable for Medicare tax purposes. Medicare wages are the gross wages less the health and dental deductions. Taxable wages are gross wages less health dental 401/457 PERS and other retirement deductions. Not sure what social security wages are... social security wages are not always the same as medicare. Medicare wages and Social Security Wages. aliaricam3. On most W-2s, they are the same amount. However, employee contributions to either a Flexible Spending Account or to a 401K/403B pension plan may reduce the wage figure in Block #1. These contributions have NO EFFECT on the Block #3 (social security wages) or Block #5 (medicare wages) figure.
No, Medicare wages are the gross wages less the health and dental deductions.