Box 3 SS wages not same as gross income

[JillPill]

I hope you good folks have some insight on this. I've noticed the last 2 or 3 years that the Social Security wages (box 3 of my w-2) are lower (this year by close to $7000) than the year to date gross income reported on my last paystub of 2019.

I have searched the ssa.gov website as well good old google results but haven't been able to figure out what is being excluded from the number reported in box 3.

Any ideas? Thanks in advance!

 

[gerntz]

If your gross income is larger than the maximum income for SS deduction, that would be true.

 

[njhowie]

Do you have high income? SS deductions max out at $132,900 in 2019. Was $128,400 in 2018.

 

[JillPill]

Nope. In my prior career as a commercial real estate attorney I hit the Social Security max for several years. My salary these days as a housing counselor is well below the SS max (and I don't regret the career change one bit - you can't put a price on happiness

 

[kaneohe]

https://oc.finance.harvard.edu/how-to/understanding-your-w2-wages

any pre-tax health care deductions?

 

[JillPill]

https://oc.finance.harvard.edu/how-to/understanding-your-w2-wages

any pre-tax health care deductions?

Yes... I just did the calculations. Employer allows payment of my portion of my health insurance premium pre-tax. I have never opted to pay in more (some people do if they have lots of health related expenses).

Quite a hit on my social security wages though (which is what Social Security uses to establish my Social Security benefit) Good thing I had all those years at the Social Security max..

Thanks for the reply.

 

[ziggy29]

Yes... I just did the calculations. Employer allows payment of my portion of my health insurance premium pre-tax. I have never opted to pay in more (some people do if they have lots of health related expenses).

Quite a hit on my social security wages though (which is what Social Security uses to establish my Social Security benefit) Good thing I had all those years at the Social Security max..

Yes, if you have the option to contribute to an FSA and/or HSA through a workplace cafeteria benefits plan (Section 125), what you contribute is taken out not only before income tax, but also before SS and Medicare taxes are deducted.

And yes, that will (probably) slightly reduce your SS benefit eventually, but if you save and invest the difference you will likely come out ahead, especially since SS payouts have diminishing returns as your earned income increases.

 

[clobber]

My salary these days as a housing counselor is

I'm interested in what exactly you do?

 

[gauss]

I'm interested in what exactly you do?

LOL -- couldn't resist.

https://youtu.be/m4OvQIGDg4I?t=49

 

[neihn]

LOL -- couldn't resist.

https://youtu.be/m4OvQIGDg4I?t=49

 

[JillPill]

I'm interested in what exactly you do?

My works consists of foreclosure prevention counseling (working with homeowners and their loan servicers to save their homes from foreclosure), financial coaching - for people looking to work on their budgets, credit scores, savings etc., reverse mortgage counseling - anyone applying with a lender to get a reverse mortgage must first be counseled in all aspects of the loan and first time homebuyer classes - 8 hour classes (or a combination of online learning and in-person class time).

Other people in my agency work with homeless people and families to obtain and retain affordable housing.

 

[clobber]

My works consists of foreclosure prevention counseling (working with homeowners and their loan servicers to save their homes from foreclosure), financial coaching - for people looking to work on their budgets, credit scores, savings etc., reverse mortgage counseling - anyone applying with a lender to get a reverse mortgage must first be counseled in all aspects of the loan and first time homebuyer classes - 8 hour classes (or a combination of online learning and in-person class time).

Other people in my agency work with homeless people and families to obtain and retain affordable housing.

Interesting, thanks.