Question

Phil is the manager of a pool supply store. His Form W-2 for 2017:Wages: $106,503 Federal Tax Withheld: $11,626 State Income Tax Withheld $5,600 Social Security Wages: $111,056 Social Security Tax Withheld: $5775 Medicare Wages: $111,056 Medicare Tax Withheld: $2721 Phil was a participant in an employer sponsored retirement plan I know how to place the wages from his job income on the 1040, but I'm just lost on how to place his Social Security income, and his Medicare income on the 1040. I'm also unsure on his retirement plan contribution comes into play. Any help is appreciated?

Answer 1

Social security wages are maximum amount of covered wages that are taken into account when calculating average earnings of the worker to determine Social security benefits. Employer deduct tax on it and deposit it to IRS with equal contribution from his side. If any retired person is receiveing Social security benefits, it will come in Line 20a in form 1040.

Social security wages and social security tax withheld appears only in W-2. If excess social security tax is paid then to get refund, you can enter the excess amount in Line 69 of form 1040.