8 Withholding and Reading Your Tax Documents
Question for this chapter. How do the boxes on my W-2 and my other tax documents connect to my federal return, and does heavy withholding mean I will get money back?
Answer. The wages box and the federal income tax withheld box on a W-2 feed two separate places on Form 1040: the income section and the payments section. Withholding is only tax paid in advance, so the result depends on comparing it with the year's tax figured on the return, not on how much came out of your paychecks. With several jobs or extra documents, the work is making sure each form's boxes add up to the matching return lines.
What to check
- Gather every W-2, including one from a past employer that may have arrived late, and total the wages and federal withholding boxes.
- Confirm the return's income line and total withholding line match those totals, including any withholding shown on interest, dividend or side-work forms.
- Read three figures separately: the year's tax, the tax already paid, and the difference between them.
- Check Medicare wages across all jobs against the Additional Medicare Tax threshold for your filing status, since employers and the return use different rules.
- If you have interest or dividends, or accounts abroad, look at Schedule B and the separate foreign account report.
What to confirm. Confirm the box names, line names and threshold values in the current-year forms and instructions, because layouts and figures change between years.
One-line summary. Match each document's boxes to the right return lines, and remember that withholding is a payment in advance, not a prediction of your result.
The full chapter is in the book. The web shows only each chapter's question, answer, checkpoints and one-line summary.