Why isn't my W-2 showing in my total income?

Are you a statutory employee?

Check your entries

If you have entered your W-2 into the program and the income is not being reported on the return, check your Box 13 entry in the program as compared to your physical W-2.

• If you have Statutory Employee checked on your W-2, a Schedule C is required to report the income properly. Continue to the Profit or Loss From a Business to report the income and expenses for the business. 
• If you accidentally checked the Statutory Employee box, uncheck the box and the income will flow to the return. 

W-2 Reporting

The employer must indicate whether a worker is classified as a statutory employee by marking box 13 on the Form W-2. Statutory employees report their wages, income, and allowable expenses on Schedule C when filing federal Form 1040. They are not subject to self-employment tax, as employers treat them as employees for Social Security tax purposes.

Unlike independent contractors, statutory employees receive a W-2 at the end of the year. This W-2 differs slightly from one given to a traditional employee, as it is marked to reflect the statutory employee status with a check in box 13. If you receive this type of W-2, ensure that you report your earnings on Schedule C, where you can also detail your allowable expenses.

Box 13 Statutory Employee

As an independent contractor, you are responsible for all FICA taxes related to your income. This means you handle the entire burden for Social Security and Medicare taxes without any employer assistance. 

As a statutory employee, you benefit from a different tax situation. For FICA taxes, you are treated as an employee, which means your employer covers their share of the tax. This can lead to a lower overall tax bill for you.

However, you are still classified as an independent contractor for income tax purposes, allowing you to deduct unreimbursed business expenses. While individual circumstances may vary, being a statutory employee typically results in a lower tax obligation at the end of the year compared to being a fully independent contractor.