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4.3 Form W-2, W-3 & 1099 Year-End Information Reporting

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1 Chapter 1: Worker Classification, Section 530 & FLSA Hours

1.1 Worker Status & Common Law Classification Tests 1.2 Statutory Employees, Statutory Non-Employees & Section 530 Relief 1.3 FLSA Hours Worked, Travel Time, On-Call & Waiting Time 1.4 Public Sector Payroll, Government Contract Acts & Youth Employment

2 Chapter 2: FLSA Exemptions, Pay Frequency & Wage Payments

2.1 FLSA White-Collar Exemptions & Salary Basis Test 2.2 Pay Frequency Laws, Direct Deposit & NACHA Compliance 2.3 Payroll Cards, Paycheck Delivery & Constructive Receipt

3 Chapter 3: Employment Taxes & Core Benefit Concepts

3.1 Federal Employment Taxes: FICA, FUTA & Federal Income Tax 3.2 Section 125 Cafeteria Plans, FSA & HSA Mechanics 3.3 Third-Party Sick Pay, Disability & Professional Payroll Ethics 3.4 Benefit Law Compliance: ACA, COBRA, HIPAA, FMLA, ERISA & Workers' Compensation

4 Chapter 4: Withholding Forms, I-9 Verification & Information Returns

4.1 Form W-4 Withholding Certificates & Lock-In Letters 4.2 Form I-9 Employment Eligibility, E-Verify & Nonresident Aliens 4.3 Form W-2, W-3 & 1099 Year-End Information Reporting

5 Chapter 5: Payroll Tax Returns, Deposit Schedules & Multi-State Compliance

5.1 Federal Payroll Tax Returns: Forms 941, 944, 940 & Schedule B 5.2 Federal Tax Deposit (FTD) Schedules, Lookback Periods & EFTPS 5.3 Multi-State Taxation, Nexus & SUI Localization 5.4 New Hire Reporting, Common Paymaster, Pay Agents & Multiple Worksite Reporting

6 Chapter 6: Recordkeeping, Escheatment & Statutory Penalties

6.1 Payroll Recordkeeping Requirements & Retention Schedules 6.2 Escheatment Laws & Unclaimed Property Compliance 6.3 Information Return Penalties & IRC § 6672 Trust Fund Recovery Penalty

7 Chapter 7: Global Payroll, Nonresident Aliens & International Compliance

7.1 Resident vs. Nonresident Alien Status, Visas & Treaty Withholding 7.2 Expatriate Payroll: Tax Equalization, Hypothetical Tax, Shadow Payroll & Currency 7.3 Totalization Agreements, GDPR & Global Payroll Governance

8 Chapter 8: Regular Rate of Pay & FLSA Overtime Calculations

8.1 Regular Rate of Pay Determination & Statutory Exclusions 8.2 Weighted-Average Overtime for Multiple Pay Rates 8.3 Special FLSA Overtime Methods: Fluctuating Workweek & 8/80 Rule 8.4 Tipped Employees: Tip Credit, Tip Pooling, Overtime & Form 8027

9 Chapter 9: Supplemental Wages, Fringe Benefits & Vehicle Valuation

9.1 Supplemental Wage Withholding: Flat vs. Aggregate Methods 9.2 Employer-Provided Vehicles & Fringe Benefit Valuation 9.3 Group-Term Life Insurance & Section 79 Imputed Income

10 Chapter 10: Involuntary Deductions & Garnishment Administration

10.1 Child Support Withholding & CCPA Maximum Limits 10.2 Federal Tax Levies & Form 668-W Calculations 10.3 Creditor Garnishments, Student Loans & Order Priority

11 Chapter 11: Pre/Post-Tax Deductions, Gross-Up & Special Payments

11.1 Voluntary Deductions: Pre-Tax vs. Post-Tax Ordering & Limits 11.2 Gross-Up Calculations for Net Pay Guarantees 11.3 Final Pay, PTO Payouts & Deceased Employee Wage Processing

12 Chapter 12: Master File Architecture, Processing Controls & Timekeeping

12.1 Employee Master File Setup, Maintenance & Data Integrity 12.2 End-to-End Payroll Processing Cycle & Pre/Post Controls 12.3 Time and Attendance Systems, Rounding & Exception Management

13 Chapter 13: ACH Direct Deposit, Software Migration & Systems Security

13.1 Direct Deposit Operations: ACH Files, Returns & Reversals 13.2 Payroll System Selection, Implementation & Data Migration 13.3 Business Continuity Planning & Disaster Recovery

14 Chapter 14: Policies, Procedures, Department Design & Management

14.1 Standard Operating Procedures (SOPs), Policies & Compliance Governance 14.2 Payroll Department Structure, Staffing & Capacity Planning 14.3 Change Management, M&A Harmonization & Employee Communication

15 Chapter 15: Customer Service, Cross-Functional Alignment & Vendor Governance

15.1 Payroll Customer Service Delivery, SLAs & Inquiry Resolution 15.2 Cross-Functional Alignment: HR, Benefits, Finance & IT 15.3 Third-Party Vendor Management & Payroll KPI Benchmarking

16 Chapter 16: Internal Controls, Fraud Detection & Operational Audits

16.1 Internal Control Frameworks, Segregation of Duties & Governance 16.2 Payroll Fraud Schemes, Detection Techniques & Forensic Auditing

17 Chapter 17: Regulatory Audits, SOX 404 & SOC 1 Reports

17.1 Regulatory Audits: IRS, DOL, State Agencies & Penalty Defense 17.2 SOX 404 Internal Controls & SOC 1 Type II Report Governance

18 Chapter 18: Payroll Accounting Basics, Journal Entries & Accruals

18.1 Double-Entry Payroll Accounting: Gross Wages, Deductions & Taxes 18.2 Employer Payroll Tax Liabilities, FUTA/SUTA & Benefit Costs 18.3 Month-End Wage Accruals & ASC 710 Vacation/PTO Accounting

19 Chapter 19: Reconciliations, Clearing Accounts & Variance Resolution

19.1 Payroll Clearing Accounts, Zero-Balance Accounts & Bank Tie-Outs 19.2 General Ledger to Form 941/W-2 Reconciliations & Variances

4.3 Form W-2, W-3 & 1099 Year-End Information Reporting

Key Takeaways Explain This Topic AI

Form W-2 reporting requires precise box-by-box tax reconciliations, distinguishing between Box 1 federal taxable wages, Box 3 Social Security wages (capped at the statutory base), and Box 5 uncapped Medicare wages.

Box 12 utilizes strict alpha codes to track critical benefits and deferrals, including Code D for 401(k), Code W for HSA contributions, Code DD for employer health coverage cost, and Code AA for Roth 401(k).

Form W-3 serves as the annual transmittal summary, and its totals for wage and tax boxes must tie out perfectly to the cumulative sum of the employer's four quarterly Forms 941.

Errors on previously filed Forms W-2 must be corrected using Form W-2c and transmittal Form W-3c, maintaining exact audit trails for previously reported and corrected amounts.

Under Treasury Decision 9972, employers filing 10 or more information returns in the aggregate across all form types (W-2, 1099, 941, ACA) are legally mandated to file electronically.

Last updated: October 2026

Form W-2, W-3 & 1099 Year-End Information Reporting

Year-end information reporting represents the culmination of the payroll processing cycle. Employers must accurately reconcile and transmit wage and tax statements to employees, the Social Security Administration ( SSA ), the Internal Revenue Service ( IRS ), and state and local tax authorities. A thorough mastery of Form W-2 box reconciliations, Box 12 codes , Form W-2c corrections , Form 1099 information returns , and the electronic filing mandates under Treasury Decision (TD) 9972 is essential for Certified Payroll Professionals.

1. Form W-2 Box-by-Box Technical Reconciliations

Form W-2 ( Wage and Tax Statement ) reports an employee's annual taxable compensation and statutory tax withholdings. Different payroll deductions and benefits impact federal income tax wages ( Box 1 ), Social Security wages ( Box 3 ), and Medicare wages ( Box 5 ) in fundamentally different ways. +-----------------------------------------------------------------------------+

  • | FORM W-2 TAXABLE WAGE BASE BRIDGING MODEL |
  • | |
  • | GROSS EARNINGS (Salary, Hourly, Overtime, Bonuses, Commissions) |
  • | | |
  • | +---> LESS: Pre-Tax Cafeteria Plan Reductions (IRC § 125) |
  • | | (Health, Dental, Vision, Medical FSA, Dep Care, HSA) |
  • | | |
  • | +---> LESS: Qualified Transportation Fringe Benefits (IRC § 132(f)) |
  • | | |
  • | v |
  • | [FICA WAGE BASE] = Gross - Section 125 - Section 132(f) |
  • | | |
  • | +---> BOX 3: Social Security Wages = MIN(FICA Wage Base, SS Wage Base) |
  • | +---> BOX 5: Medicare Wages = FICA Wage Base (UNCAPPED) |
  • | | |
  • | +---> LESS: Pre-Tax Retirement Deferrals (IRC § 401(k), 403(b), 457(b))|
  • | | |
  • | +---> PLUS: Taxable Fringe Benefits (GTL > $50k Imputed Income, ALV) |
  • | | |
  • | v |
  • | [BOX 1: FEDERAL TAXABLE WAGES] |
  • +-----------------------------------------------------------------------------+
  • Comprehensive Form W-2 Box Architecture

Box Number Box Title Statutory Definition & Reconciliation Formula

Box 1 Wages, tips, other comp. Gross Wages - § 125 Deductions - Pre-Tax Retirement Deferrals + Taxable Noncash Fringe Benefits. Does not include employee Roth 401(k) contributions.

Box 2 Federal income tax withheld Total federal income tax withheld from all regular and supplemental wage payments during the calendar year.

Box 3 Social Security wages FICA taxable wages up to the statutory annual Social Security wage base ($184,500 for 2026). Section 125 deductions reduce Box 3, but 401(k)/403(b) deferrals do not .

Box 4 Social Security tax withheld Exactly 6.2% of Box 3 (plus Box 7 tips). Cannot exceed the statutory maximum (6.2% × Annual Wage Base).

Box 5 Medicare wages and tips Total FICA taxable wages subject to Medicare. No wage cap exists .

Box 6 Medicare tax withheld Total Medicare tax withheld (1.45% on all Box 5 wages, plus 0.9% Additional Medicare Tax on wages in excess of $200,000 paid to the employee).

Box 7 Social Security tips Cash tips reported by the employee to the employer under IRC § 6053(a).

Box 8 Allocated tips Tips allocated by large food/beverage employers under IRC § 6053(c). Not included in Boxes 1, 3, 5, or 7 ; no taxes are withheld.

Box 10 Dependent care benefits Total dependent care assistance benefits paid or incurred under IRC § 129 (pre-tax FSA + employer subsidy). Amounts exceeding $5,000 are also included in Boxes 1, 3, and 5.

Box 11 Nonqualified plans Distributions to an employee from a Section 409A nonqualified deferred compensation plan or Section 457 governmental plan.

Box 13 Statutory Checkboxes Three distinct indicator checkboxes: Statutory Employee , Retirement Plan , and Third-Party Sick Pay .

Box 14 Other Discretionary employer reporting for state disability tax, union dues, educational assistance (IRC § 127), SUI employee taxes, etc.

Boxes 15–20 State and Local Tax Data Box 15 (State & State ID), Box 16 (State taxable wages), Box 17 (State income tax withheld), Box 18 (Local wages), Box 19 (Local income tax withheld), Box 20 (Locality name).

Box 13 Checkbox Rules:

Statutory Employee: Checked only if the worker is a statutory employee under IRC § 3121(d)(3) (the DISCO categories). Indicates to the IRS that Box 1 wages can be reported on Schedule C without self-employment tax.

Retirement Plan: Checked if the employee was an active participant in an employer-sponsored retirement plan (e.g., 401(k), 403(b), SEP, SIMPLE, defined benefit pension) for any part of the year. This checkbox informs the IRS that the employee's traditional IRA deduction on Form 1040 may be limited based on income phaseouts.

Third-Party Sick Pay: Checked if the Form W-2 is filed by an employer reporting sick pay paid by a third-party insurance carrier, or filed by a third-party payer acting as an employer agent.

2. Form W-2 Box 12 Alpha Codes Mastery

Box 12 is used to report specific deferred compensation plans, statutory fringe benefits, and health coverage data using standard uppercase single- and double-letter alpha codes: +-----------------------------------------------------------------------------+

  • | FORM W-2 BOX 12 ESSENTIAL CODES |
  • | |
  • | RETIREMENT DEFERRALS: HEALTH & FRINGE BENEFITS: |
  • | - Code D: Section 401(k) Deferral - Code C: Taxable GTL over $50k |
  • | - Code E: Section 403(b) Deferral - Code V: Nonstatutory Stock Option|
  • | - Code G: Section 457(b) Deferral - Code W: Employer HSA Contrib. |
  • | - Code S: SIMPLE IRA Deferral - Code DD: Cost of Employer Health |
  • | - Code AA: Designated Roth 401(k) - Code FF: QSEHRA Permitted Benefit |
  • | - Code BB: Designated Roth 403(b) |
  • | - Code EE: Designated Roth 457(b) SICK PAY & MILITARY: |
  • | - Code J: Nontaxable Sick Pay |
  • | NONQUALIFIED DEFERRED COMP (409A): - Code P: Excludable Mil. Moving |
  • | - Code Y: 409A Annual Deferrals - Code Q: Nontaxable Combat Pay |
  • | - Code Z: 409A Income/Violations |
  • +-----------------------------------------------------------------------------+
  • Detailed Analysis of Primary Box 12 Codes

Code C — Taxable Cost of Group-Term Life Insurance over $50,000: Imputed income calculated using IRS Table I (IRC § 79). Included in Boxes 1, 3, and 5; subject to FICA, but exempt from mandatory FITW.

Code D — Elective Deferrals to Section 401(k) Plan: Pre-tax employee elective deferrals. Reduces Box 1, but is included in Boxes 3 and 5.

Code E — Elective Deferrals to Section 403(b) Plan: Pre-tax salary reduction for public school and 501(c)(3) tax-exempt employees.

Code G — Deferrals to Section 457(b) Plan: Elective and nonelective deferrals to state/local government and tax-exempt deferred compensation plans.

Code J — Nontaxable Sick Pay: Sick pay paid by a third-party payer that is not includible in gross income because it is attributable to employee post-tax contributions.

Code V — Income from Exercise of Nonstatutory Stock Option(s): Spread between fair market value and exercise price upon exercise. Included in Boxes 1, 3, and 5.

Code W — Employer Contributions to Health Savings Account (HSA): Aggregate sum of all employer HSA contributions plus employee pre-tax HSA contributions made through a Section 125 cafeteria plan. Excluded from Boxes 1, 3, and 5.

Code AA — Designated Roth Contributions under a Section 401(k) Plan: Post-tax employee contributions. Included in Boxes 1, 3, and 5 .

Code BB — Designated Roth Contributions under a Section 403(b) Plan: Post-tax employee deferrals.

Code DD — Cost of Employer-Sponsored Health Coverage: Mandatory ACA reporting for employers filing 250+ Forms W-2 in the prior year. Represents aggregate cost of major medical coverage (employer + employee share). Purely informational; not taxable .

3. Form W-3 Transmittal & Federal Balancing Reconciliations

Form W-3 ( Transmittal of Wage and Tax Statements ) summarizes all individual Forms W-2 filed under an employer's Federal Employer Identification Number ( EIN ). It acts as the master balancing document submitted to the Social Security Administration. +-----------------------------------------------------------------------------+

  • | ANNUAL FORM W-3 TO FORM 941 RECONCILIATION |
  • | |
  • | FORM W-3 TOTALS FORM 941 QUARTERLY SUMS |
  • | =================== ======================== |
  • | Box 1 (Federal Wages) <=================> Sum of Q1-Q4 Lines 2 |
  • | Box 2 (FITW Withheld) <=================> Sum of Q1-Q4 Lines 3 |
  • | Box 3 (SS Wages) <=================> Sum of Q1-Q4 Lines 5a(col 1)|
  • | Box 4 (SS Tax Withheld) <=================> Sum of Q1-Q4 Lines 5a(col 2)/2|
  • | Box 5 (Medicare Wages) <=================> Sum of Q1-Q4 Lines 5c(col 1)|
  • | Box 6 (Medicare Tax) <=================> Sum of Q1-Q4 Lines 5c + 5d |
  • +-----------------------------------------------------------------------------+

Important

The Combined Annual Wage Reporting (CAWR) Audit: The SSA shares Form W-3 data directly with the IRS. Discrepancies between Form W-3 totals and the employer's four quarterly Forms 941 trigger an automated CAWR inquiry notice (SSA Questionnaire or IRS Notice 98-C / 99-C), requiring formal line-by-line reconciliation and potential penalty exposure under IRC § 6721.

4. Form W-2c and Form W-3c Correction Workflow

When an error is discovered on a previously filed Form W-2, the employer must correct the record using Form W-2c ( Corrected Wage and Tax Statement ) and transmit it with Form W-3c ( Transmittal of Corrected Wage and Tax Statements ). +-----------------------------------------------------------------------------+

  • | FORM W-2c CORRECTION MATRIX |
  • | |
  • | Type of Error Correction Procedure on Form W-2c |
  • | ---------------------- ----------------------------------------------- |
  • | Incorrect Employee SSN Complete Boxes a-d, Box e (Incorrect SSN), |
  • | or Legal Name ONLY Box f (Corrected SSN/Name). Leave monetary |
  • | Boxes 1-20 completely BLANK. |
  • | |
  • | Incorrect Wage/Tax Complete demographic boxes, then enter BOTH: |
  • | Monetary Amounts - "Previously reported" (original incorrect sum) |
  • | - "Correct information" (true corrected sum) |
  • | Complete ONLY the specific boxes being corrected. |
  • +-----------------------------------------------------------------------------+
  • FICA Tax Overpayment Corrections

If a Form W-2c reduces previously reported FICA wages or taxes, the employer must obtain a written employee certification statement prior to claiming an employer refund on Form 941-X ( Adjusted Employer's QUARTERLY Federal Tax Return ). The employee must certify that they have not claimed and will not claim a credit or refund from the IRS for the over-withheld employee FICA tax.

5. Form 1099 Series Information Reporting

Employers frequently issue information returns in the Form 1099 series for non-wage disbursements made in the course of trade or business: +-----------------------------------------------------------------------------+

  • | FORM 1099 SERIES COMPARISON TABLE |
  • | |
  • | Form / Purpose Reporting Threshold Filing & Recipient Deadline|
  • | --------------------- ---------------------- ---------------------------|
  • | Form 1099-NEC $2,000+ per year for Recipient: January 31 |
  • | (Nonemployee Comp) services to ICs (2026; IRS: January 31 |
  • | $600 through 2025) (Paper AND Electronic) |
  • | |
  • | Form 1099-MISC $2,000+ in 2026 ($600+ Recipient: January 31 |
  • | (Miscellaneous Income) through 2025): Rents, IRS Paper: February 28 |
  • | Prizes, Box 3 Other; IRS Electronic: March 31 |
  • | $10+ (Royalties); |
  • | $600+ (Attorney Gross) |
  • | |
  • | Form 1099-R $10 or more for total Recipient: January 31 |
  • | (Retirement & Pension) distributions from IRS Paper: February 28 |
  • | pensions, IRAs, 401(k) IRS Electronic: March 31 |
  • +-----------------------------------------------------------------------------+

Critical Reporting Nuances:

Form 1099-NEC Box 1: Reports nonemployee compensation paid to sole proprietorships, partnerships, LLCs, and independent contractors. Payments to incorporated entities are generally exempt, except for payments to attorney corporations for legal services.

Form 1099-MISC Box 3 (Other Income): Reports payments such as deceased employee wages paid in a calendar year subsequent to the year of death (Rev. Rul. 71-456), litigation settlements, and employee achievement prizes/awards exceeding excludable limits.

Form 1099-MISC Box 10 (Gross Proceeds Paid to an Attorney): Reports total settlement proceeds paid to an attorney in connection with legal services, regardless of whether the legal firm is incorporated.

6. Treasury Decision 9972 Electronic Filing Mandates

Under final regulations issued in Treasury Decision 9972 , the Department of the Treasury and the IRS substantially lowered the threshold for mandatory electronic filing of information returns: +-----------------------------------------------------------------------------+

  • | TD 9972 ELECTRONIC FILING MANDATE FRAMEWORK |
  • | |
  • | OLD RULE (Pre-2024): |
  • | - 250-Return Threshold evaluated SEPARATELY per form type |
  • | (e.g., 200 Forms W-2 + 100 Forms 1099-NEC = ALL could file on paper) |
  • | |
  • | CURRENT TD 9972 MANDATE (Tax Year 2023 / Effective 2024+): |
  • | - AGGREGATE 10-RETURN THRESHOLD across ALL information returns! |
  • | |
  • | AGGREGATION POOL INCLUDES: |
  • | [Forms W-2] + [Forms 1099-NEC/MISC/R] + [Forms 1094/1095] + |
  • | [Forms 941/940] + [Forms 1042-S] + [Forms 8027] |
  • | |
  • | IF TOTAL AGGREGATE RETURNS >= 10 ===> MUST FILE ALL ELECTRONICALLY |
  • +-----------------------------------------------------------------------------+

Impact on Small Employers:

If a business employs 6 workers (requiring 6 Forms W-2), utilizes 3 independent contractors (requiring 3 Forms 1099-NEC), and files 1 Form 1099-MISC for office rent, the total aggregate count is: 6 + 3 + 1 = 10 returns 6 + 3 + 1 = 10\text{ returns} 6 + 3 + 1 = 10 returns

Because the aggregate count reaches the 10-return threshold , the employer must file every single Form W-2 and Form 1099 electronically . Filing on paper without an approved IRS hardship waiver (Form 8508) exposes the employer to failure-to-file penalties under IRC § 6721.

7. Worked Example: Comprehensive Form W-2 Wage Reconciliation

Scenario:

An employee has the following annual payroll ledger entries for the calendar year:

  • Gross Salary: $120,000.00
  • Section 125 Pre-Tax Health Insurance Premium: $4,800.00
  • Section 125 Health FSA Salary Reduction: $2,400.00
  • Section 125 Pre-Tax HSA Contribution: $3,000.00
  • Traditional Section 401(k) Elective Deferral: $10,000.00
  • Designated Roth 401(k) Contribution: $4,000.00
  • Group-Term Life Insurance Imputed Income (over $50,000): $600.00

Employer-Sponsored Health Coverage Cost (ACA total): $14,000.00 +-----------------------------------------------------------------------------+

  • | FORM W-2 BOX VALUES RECONCILIATION LEDGER |
  • | |
  • | 1. SECTION 125 PRE-TAX REDUCTIONS TOTAL: |
  • | $4,800 (Health) + $2,400 (FSA) + $3,000 (HSA) = $10,200.00 |
  • | |
  • | 2. BOX 3 (SOCIAL SECURITY WAGES) & BOX 5 (MEDICARE WAGES): |
  • | Gross ($120,000) - Sec 125 ($10,200) + GTL ($600) = $110,400.00 |
  • | - Box 3 Social Security Wages: $110,400.00 |
  • | - Box 4 Social Security Tax ($110,400 x 6.2%): $6,844.80 |
  • | - Box 5 Medicare Wages: $110,400.00 |
  • | - Box 6 Medicare Tax ($110,400 x 1.45%): $1,600.80 |
  • | |
  • | 3. BOX 1 (FEDERAL TAXABLE WAGES): |
  • | Gross ($120,000) - Sec 125 ($10,200) - 401(k) ($10,000) + GTL ($600) |
  • | - Box 1 Wages, Tips, Other Comp: $100,400.00 |
  • | |
  • | 4. BOX 12 ALPHA CODES: |
  • | - Box 12, Code C (Taxable GTL Imputed Income): $600.00 |
  • | - Box 12, Code D (401(k) Pre-Tax Elective Deferrals): $10,000.00 |
  • | - Box 12, Code W (HSA Pre-Tax Contributions): $3,000.00 |
  • | - Box 12, Code AA (Designated Roth 401(k) Contributions): $4,000.00 |
  • | - Box 12, Code DD (Cost of Employer Health Coverage): $14,000.00 |
  • | |
  • | 5. BOX 13 CHECKBOX: |
  • | - "Retirement Plan" Checkbox: CHECKED |

+-----------------------------------------------------------------------------+ Box 1 = $ 120 , 000 − $ 10 , 200 − $ 10 , 000 + $ 600 = $ 100 , 400.00 \text{Box 1} = \$120,000 - \$10,200 - \$10,000 + \$600 = \$100,400.00 Box 1 = $120 , 000 − $10 , 200 − $10 , 000 + $600 = $100 , 400.00 Box 3 = $ 120 , 000 − $ 10 , 200 + $ 600 = $ 110 , 400.00 \text{Box 3} = \$120,000 - \$10,200 + \$600 = \$110,400.00 Box 3 = $120 , 000 − $10 , 200 + $600 = $110 , 400.00 Box 4 = $ 110 , 400 × 6.2 % = $ 6 , 844.80 \text{Box 4} = \$110,400 \times 6.2\% = \$6,844.80 Box 4 = $110 , 400 × 6.2% = $6 , 844.80 Box 5 = $ 120 , 000 − $ 10 , 200 + $ 600 = $ 110 , 400.00 \text{Box 5} = \$120,000 - \$10,200 + \$600 = \$110,400.00 Box 5 = $120 , 000 − $10 , 200 + $600 = $110 , 400.00 Box 6 = $ 110 , 400 × 1.45 % = $ 1 , 600.80 \text{Box 6} = \$110,400 \times 1.45\% = \$1,600.80 Box 6 = $110 , 400 × 1.45% = $1 , 600.80