Page 157 - Essentials of Payroll: Management and Accounting

ESSENTIALS of Payr oll: Management and Accounting
that exceeds the statutory limit set for Social Security wages in any
given year will see only the statutory limit listed in this box.
Box 4: Social Security tax withheld.
List the total amount of Social Security taxes withheld for the cal-
endar year in this box.

Box 5: Medicare wages and tips.
The total amount of all compensation paid during the year should
be listed here. Unlike Social Security, there is no upper limit on the
wages on which Medicare taxes are paid, so in most cases the num-
ber listed in this box will be the same as the one listed in Box 1.

Box 6: Medicare tax withheld.
List the total amount of Medicare taxes withheld for the calendar
year in this box.
Box 12c: Cost of group term life insurance over $50,000.
As explained earlier in the “Life Insurance” section, the value of all
life insurance purchased by an employer on behalf of its employees
in excess of $50,000 must be reported as income. This portion of
total compensation is itemized in Box 12 next to a signifying letter
“G.” There is also room for additional special payments in this box.

Box 12k: Excise tax on golden parachute payments.
As explained earlier in the “Golden Parachute Payments” section,
the employer must withhold a 20 percent excise tax on excessively
large golden parachute payments. The total excise tax is listed in
Box 12 next to a signifying letter “K.”

In addition, state and local wage and income tax withholding informa-
tion is listed across the bottom of the form in Boxes 15 through 20.

Employer’s Annual Tip Income Tax Return

An employer is required to submit a Form 8027, “Employer’s Annual
Information Return of Tip Income and Allocated Tips,” to the IRS no

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