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 represents an employee's taxable wages, while Box 3 represents the amount of wages that are subject to Social Security taxes. If the amounts in these two boxes are different, it could be because the employee contributed to a pre-tax retirement plan, such as a 401(k), which would reduce their taxable wages in Box 1 but not affect the amount subject to Social Security in Box 3. Therefore, option B is the best choice.

Annabelle Is Employed as an Administrator for GRM Industries