Next, Solo W-2, Inc. subtracts the following division expenses:

• The employer's share of actual payroll taxes
  
  
• Group insurance premiums, if due
  
  
• Approved reimbursable expenses
  
  
• The employer's contribution to your retirement savings account

You may select up to three accounts for direct deposit and you may specify how payment is made to each account. For example, you may allocate your direct deposit as follows:

• $275 flat payment to Account #1
  
  
• $500 to Account #2
  
  
• Remainder to Account #3

Your division report and your pay stub together provide a complete accounting of the cash flow through your division leading to your tax-advantaged Solo W-2™ net wage.

Your Solo W-2™ net wage is the take-home pay you get to keep after the withholding of tax-exempt payroll payments, taxable payroll payments, and income taxes.

• Tax-exempt payroll payments include:

  • One-half (the employee's share) of your Social Security and Medicare taxes.
    
    
  • Additional payroll taxes (varies from state to state).
    
    
  • Payroll contribution (the employee's contribution) to your retirement savings account.
    
    
• Taxable payroll payments include:
  
  
  • Premium for long term disability insurance, which makes possible tax-free benefit payments -- a tremendous advantage.
    
    
  • Premium for life insurance policy if above $50,000 benefit amount (Maximum allowed by IRS for a tax-free life insurance benefit).
    
    
    • The excess premium is listed on your pay stub as “GTL” (Group Term Life).
      
      
    • The excess premium amount is considered a “taxable fringe benefit” by the IRS, and it must be taxed as “income”.
      
      
  • Court ordered lien payments, spousal support, child support, and other court ordered payments imposed by the courts on your employer.
    
    
• Income tax withholdings include:
  
  
  • Federal income tax.
    
    
  • State income tax (where applicable).
    
    
  • Local income taxes (where applicable)

You may access past and current pay stubs at any time by logging on to the ADP Web site and entering your user ID and password.

At the end of the year, Solo W-2, Inc. reports total wages and withheld taxes to the IRS on IRS Form W-2, Wage and Tax Statement. Solo W-2, Inc. transmits this form to the IRS at the end of the year, and gives you a copy.