What this line means
Total wages and tips subject to Social Security tax from all your W-2 forms. Add together Box 3 (Social Security wages) and Box 7 (Social Security tips) from every W-2 you received. If you also received railroad retirement compensation (RRTA), include that too. This amount tells the IRS how much of the Social Security wage base your employer wages have already consumed, which determines how much of your SE earnings are subject to the 12.4% Social Security tax.
Does this apply to you?
- You worked as a W-2 employee in addition to being self-employed
- You received wages subject to Social Security tax from one or more employers
- You earned tips that were subject to Social Security withholding
- You received railroad retirement (RRTA) compensation during the tax year
Easy to overlook
Use Box 3 and Box 7, not Box 1 W-2 Box 1 (wages, tips, other compensation) is not the same as Box 3 (Social Security wages). Box 1 is reduced by pre-tax deductions like 401(k) contributions, while Box 3 is not. If you use Box 1 instead of Box 3, you understate the Social Security wages already consumed by employment, which overstates the remaining ceiling on line 8b and makes you pay too much Social Security tax on your SE earnings. 1 IRS Schedule SE instructions — Line 5a
Multiple W-2s must all be included If you held two or more jobs during the year, add Box 3 and Box 7 from every W-2. Each employer withholds Social Security tax independently — neither knows what the other has withheld. Missing a W-2 means line 5a understates your employment wages, and you overpay the Social Security portion of SE tax. 2 General filing pattern — wrong W-2 box used for Social Security wages
Watch out for this
Including wages from a W-2 that was exempt from Social Security tax. Certain government employees under FERS or state retirement systems receive W-2s with zero in Box 3. Including a W-2 with no Social Security wages does not change line 5a, but adding an incorrect amount from Box 1 of such a W-2 inflates your reported Social Security wages and reduces the SE tax you owe.
Footnotes
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IRS Schedule SE (Form 1040) Instructions, Line 5a. https://www.irs.gov/instructions/i1040sse ↩
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IRS Form W-2, Wage and Tax Statement, Box 3 Instructions. https://www.irs.gov/forms-pubs/about-form-w-2 ↩