Annabelle is employed as an administrator for GRM Industries.She noticed that her Box 1 and Box 3 amounts on her W-2 were different.
What is a reason why the amounts in boxes 1 and 3 would be different?

Question

Annabelle is employed as an administrator for GRM Industries.She noticed that her Box 1 and Box 3 amounts on her W-2 were different. 
What is a reason why the amounts in boxes 1 and 3 would be different?

Quizplus · Accepted Answer

Box 1 on a W-2 form reports an employee's taxable wages, whereas Box 3 reports the wages subject to Social Security tax. One reason why the amounts in Box 1 and Box 3 could be different is if an employee has contributed to a pre-tax retirement plan, such as a 401(k), which would reduce their taxable wages but not their wages subject to Social Security tax.

Annabelle Is Employed as an Administrator for GRM Industries