 If someone was to ask you, obviously, what their earnings were would be the 150, not the 147, right? If they're trying to think of what their compensation. But you can imagine, and in many situations you will have, a case where box one is lower than possibly box three and possibly box five often times. In that case, if someone asks you how much did I actually earn, you don't really want to be representing that with box one. And this gets kind of confusing because people often have issues when they're talking about how much they earn compared to how much possibly their spouses earned and how much tax they should be paying. Versus how much their tax, their spouse is paying because the tax rates are being kind of manipulated based on both of their income. That becomes an issue. And when they're working at their job, they need to know how much they're actually earning because they're going to do comparisons with other people that are earning whatever they're earning. And honestly, sometimes because of the complication with the way things are set up, people start to think, well, box one is my earnings. And so they're not taking into consideration the fact that they're earning more than that because you're getting compensation in the form of benefits, right? And the reason that you get the benefits is because you get a tax break on it. So it's actually you're getting more compensation because of the benefits. So really kind of box five is more closer to your actual wages. And it's good if there's a big difference between box five and box one because that means you're taking substantial advantage of benefits, which are giving you those benefits plus a giant tax break on the benefits, right? So it gets kind of messy. Obviously taxes kind of messy, make everything more messy. But let's enter something like this. So this might look something like this. So this usually happens for a higher income individual, of course. So now we're going to say box one says 140,000, right? That's what box one said. And then box two is 35,000. So I'll say, OK, 35,000. And then box three is Social Security, which it capped it capped for us once again at 140,000. It should be 140,000. But that's not right because this box is low due to the fact that we put money into the, I'm going to say that's a retirement plan. So I'm going to say, all right, so 140,000. So I have to actually manually input now 147,000. It couldn't guess the right number. Tried to guess, but it's not right because of that difference. Now that I've input that it calculates the Social Security properly because it's 6.2% of whatever the Social Security wages are. And then on the Medicare, we're at 150,000. So again, it can't really guess that number. It's taking the larger of the two, but it's really 150,000. And so now once I input that, it can calculate the Medicare because the Medicare is just a flat rate based on those. And so then we got in 12, box 12, you'll often see these little letters and you can look at the instructions for the W2. And that'll be, I believe, by a 401k plan. So if I go into like box 12, I'm going to say D, there's the 10,000. And that's kind of an informational thing saying this is why there's a difference between box one, the wages for the federal income tax and the wages for the Medicare because there's that $10,000 difference. Why is the Social Security different? The Social Security is different because it got capped at the $147,000 and possibly the reduction of the $10,000 from the federal income tax we're saying isn't a reduction for Social Security. So it got capped at the $147,000 because it would have been $150,000 then if it's not going to be decreased by that $10,000 like the federal income tax. But then it got capped at the cap for Social Security $147,000. There is no cap for Medicare. So it's at the $150,000. So you can see how this gets a little bit messy, but most of the time the W2 is populated properly. So we don't have any really issue over here. We're just really kind of calculating the federal income tax type side of stuff. Okay, so I won't put that back on over into the other form right now. I'll just run a different scenario just so we can see an example of where a problem could happen. Notice that I hit the cap here at the $147,000 with this 1W2 income. But what if they worked at two separate jobs, then you're going to have a situation where they could go over the Social Security cap. So let's say we had this W2 and then this W2 for the same person. Then they're going to have overpaid on the Social Security wages if I combined them together. So for example, I'm going to go back on over and say I have a single individual, a second W2, W22. And then this one was $40,000. And we're going to say that we withheld, let's say $4,000 we said. So $4,000 withheld. Now the issue is the total of the two Social Securities are over the cap for an individual which should be $147,000 at the cap. So that means we overpaid the tax on the Social Security by this $40,000 times the $6.2 or the $2,480. So if I go back on over then and I try to look at this, I'm going to say, okay, the first page looks like normal. But then if I go to the second page, I'm going to say, okay, the tax was calculated, okay, boom. But then I've got this item down here, a amount from Schedule 3, Line 15. Schedule 3 is now populated, Line 15. So I'm going to say that Line 15 is going to be, boom, that's going to be AdLines, Line 15 from right here, from Line 11, excess Social Security. So if you see W-2s that have large dollar amounts in them and then you see multiple W-2s for one individual, it's likely that they paid more into the Social Security than they should have because they paid over the cap. So that's not going to happen all the time. It's only going to happen when you have high income people that are basically working as employees and they have multiple places that they're working for that you might see that happen. Notice the software can help to catch that kind of thing from happening, which is great. But we would like to be able to intuitively see when that would happen and you get an intuitive sense. Well, the people are making a lot of money. I expect something like that to happen because there's two W-2s and they're high income earners, so they might go over the Social Security limit. And then when the software does do it, you want to be able to double check it and say, ah, you shouldn't just be like, well, the software does whatever the thing does. You know, you'd like to be like, well, why did that happen so that we can know what happened? And also we should be able to explain that line item to a client. So we might dive more into that when we get into Social Security in a future presentation. Now, obviously you could, if you are a single individual, you might have multiple W-2 wages and it gets messy as well when you got different kinds of income. W-2 income, dividend income, interest income, Schedule C income, Schedule E income and stuff. So we'll get into more complex tax returns later, but those can complicate things in different areas such as the Social Security, for example, because if you have self-employment income, which is a Schedule C, then you also are paying Social Security on self-employment. And if you also have W-2 income, you've run into that similar kind of situation. Now, if you have a married couple, it's quite likely that you have W-2s from the two married couple. So in that situation, it becomes relevant. We have to actually assign out oftentimes which spouse the W-2s are going towards, because now you have two different people, although married, that are paying in to do two different Social Security funds. That's one reason we still have to kind of track their income separately so that the proper amounts are being allocated to the Social Security. And if one person paid over on the Social Security, we can see that. So let's see an example. Let's put them in a married couple. Okay, so now I have married filing joint. So we've got Mr. Anderson and Jane Anderson. Why do I have a checkbox up here? And then I'm going to go down. And so now I've got that same 180,000, the same scenario with those two W-2s. But now the standard deduction is 25.9. So instead of the 12.9.50, and then on page two, tax is calculated. I've got the federal income tax withheld. But the point I want to make here is that this 2004-80 is still there. Why? Because even though married, I assumed both those W-2s I indicated on the software that they were for one spouse instead of two spouses. Now if those two W-2s were for two spouses, then I wouldn't have an issue with that overpayment, right? So now I'm going to say, okay, these two W-2s were for the same spouse. What if this second W-2 was for another spouse? You're the spouse!