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Why doesn't W2 gross match paystub

harry askenazi

I am using the Q Paycheck feature and have all info inputted correctly and the net income matches what I was paid so that's good.

However, the W2 Gross that shows on Quicken's paycheck, which is factoring in all deductions and taxes I paid, is off by about 30 dollars vs what my paystub shows as Fed Taxable Gross. I tried finding an itemized line item on the paycheck that could explain this amount but aside from 2 small amounts under 2 dollars, every other item is over 30 dollars. Any idea? Thanks

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NotACPA

I show the taxable portion of my wife's "Group Term Life" as an Income item ... and then subtract it back out as an "After Tax Deduction".

The category for that $34.16 of income would probably be the same category as you use for your Gross Salary.

On the Deduction side, I use "Employer Benefit -spouse"

All comments

NotACPA

When I take the sum of the line items in the "Earnings" box (of the paycheck Wizard), and subtract the sum of the items in the "Pre-Tax Deductions" box, it exactly equals my W2 Gross.

What's your result from the same calculation?

harry askenazi

Thanks for you reply and sorry for my delayed response
Same issue as my original post. When I do the calculation you mentioned, it equals the amount shown in quicklen paycheck wizard for W2 Gross, but it does NOT equal the Fed Taxable Gross listed on my actual paycheck, despite the pre tax deductions and the Earnings amount on the paycheck matching the same categories in the paycheck wizard

NotACPA

Did this begin with the most recent paycheck, or has it been going on for a while?

And, obvious question, have you verified the "Total Earnings" and "Total Pre-tax Deductions" against your paycheck AND by using a calculator to add each up?

harry askenazi

Been consistenly off for each paycheck and yes I verified with a fool proof calculator as well.

I just reached out to my employer to understand how they are coming to that calculation. perhaps its an issue on their end.

I dont know if its possible that some pre tax deductions arent deducted from Federal taxable earnings- thats the only thing that could explain this (though it would beg the question of why Quicken doesnt pick this up)

Ps56k2

Do you have all the exact same line items entered in the Quicken Payroll wizard
vs what is listed on each payroll statement.... are there any extra line items that only happen every so often.... monthly, yearly, special entries, etc - something "missing" -
Any special benefits, health entries, etc -

NotACPA

Here's the various grouping from my wife's paycheck. How do your items compare?

Image: https://us.v-cdn.net/6031128/uploads/editor/f3/qa0llptcxqod.png

The GTE in Earnings is offset by the 1st GTL in "After-Tax". It's the imputed earnings of her Group Life Insurance that's paid by the employer and then subtracted out again to show that she didn't really receive it.

The 2nd GTL is the amount that she actually pays.

harry askenazi

All itemized line items and amounts match exactly what is on the paycheck - and the net income matches exactly what was deposited into my bank acct. you're correct that amounts change monthly but I manually change those amounts in quicken as needed. I do not have any after tax contributions and never had a GTL line.

Attached is the image of my accounts. I dont have any after

image.png

NotACPA

I'm starting to grasp at straws.

For each of the Categories (not the transfers) in Earnings and Pre-Tax that you're showing, are the Tax lines set appropriately?

harry askenazi

How would I tell? I mean I don't think I assigned any tax lines myself bc Q does that for me. I can check but I would need to know what tax lines they should be set to in order to know if they are correct. If you know the answer I'd love to hear. Otherwise, perhaps I wait to see what my employer says - maybe they're getting it wrong for all I know

NotACPA

Do TOOLS, Category list to show all of your categories. Look in the "Tax Line Item" for each of your Earnings and Pre-tax categories.

You can determine what tax line should be set by thinking about where the item would appear on your federal tax return.

harry askenazi

I heard from my employer and it turns out that there are $34.16 of taxable benefits paid by my employer that are not captured in Quicken. So that is why there is a mismatch.
Where is the best place to note the company paid taxable benefits in the Quicken paycheck split screen?

NotACPA

I show the taxable portion of my wife's "Group Term Life" as an Income item ... and then subtract it back out as an "After Tax Deduction".

The category for that $34.16 of income would probably be the same category as you use for your Gross Salary.

On the Deduction side, I use "Employer Benefit -spouse"

harry askenazi

Thanks - to be clear:
On the paycheck setup/edit screen, are you saying you'd have 2 line items for the $34.16 amount, 1 categorized as income and the other as after tax deduction?

NotACPA

Yes. One in the "Earnings" section, and another in the "After Tax Deductions" section.

The Earnings is to record it as part of your taxable income ... and the Deductions because you don't actually receive it.

harry askenazi

Thanks I will try that and trust your advice. It seems like that may not properly capture things - especially in terms of income reporting, but I'll mark it as correct answer.

harry askenazi

Sorry one more question. How would you categorize the after tax deductions?
Would basic life be "life insurance"? What about long term disability?

For the income I just created 2 subcategories under Salary. 1 for Basic Life and the other for LTD

NotACPA

It's probably the taxable portion of your Group Term Life insurance from your employer.

SO, I set up a special category (see my graphic of 5/6) to capture that.

You, of course, can use any category that makes sense to you.

harry askenazi

I used the same category which I called "Salary:Company paid benefit" for both the "Earnings" section and the "After Tax Deductions" section.

Is this intuitive to use a Salary subcategory for both sections? The numbers now match my paycheck for W2 gross, so that piece is finally correct.

NotACPA

If you use it for both, the Deduction cancels out the Earnings ... thus, at year end, your Taxable income will be incorrect vs. the W-2.

If you do it the way that I described, they'll be correct also.

harry askenazi

> @NotACPA said:
> If you use it for both, the Deduction cancels out the Earnings ... thus, at year end, your Taxable income will be incorrect vs. the W-2.
> If you do it the way that I described, they'll be correct also.

Is this true even if, after using the same category, the W2 Gross matches the paycheck perfectly? If that number is correct, wouldn't end of year be too?

NotACPA

Think about it. If you use both a positive number (the Earnings) and a negative number (the deduction) with the same category ... they cancel each other out.

Much like if you buy something (say Clothing) and then return it to the store, you record the return using the same category (Clothing), so that the net Clothing purchase (assuming no other purchases/returns) is $0.

harry askenazi

Hmm I see your point. I do use the same category for refunds bc in that scenario, I don't want to see a report showing I spent $500 on an appliance if I then returned that appliance. But in this case I understand what you're saying.

That said, your screenshot shows the Name columns, but not the category. I don't care to see which you specifically use, but I'm wondering what you recommend since you're suggesting not to use the same category, but to still use one that makes sense for both the earning and the deduction.

NotACPA

The GTE (in Earnings) uses the same category as her Gross Salary and her income for the nights that she's On-Call (she's a Nurse Practitioner). Thus they all add to her "Gross Income" for the year.

The GTL (in After-tax) uses an expense category for both instances.

All of these categories can be anything that you want ... as long as the same category is NOT used in both Earnings and After-Tax.

harry askenazi

Thanks now I understand. Though using an expense category for the transaction being used to reduce the income that she didn't actually receive, will result in that expense category being misstated because she also didn't actually incur that expense, no? If anything, since you explained why not to use the SAME category for income and expense portion of the company paid benefit, I'd think a holding type category would be best, so that its not captured in any expense reporting

NotACPA

GTE (in Earnings) is included so that our Q records what will agree with what appears on her year-end W2 for "Wages, Tips and other compensation".

But, since she doesn't actually receive it, it has to be subtracted out SOMEWHERE (in SOME expense category), so that her Net Pay matches what she actually receives.
Certainly, you could use a different expense category to offset the GTE ... just don't use the Salary category.

And, I don't believe that there's a mis-statement of GTL, because the "phantom" GTE income is real income ... it just goes directly to her "Group Term Life", the same as her elective deduction for Group Term Life.