- Evaluating Tax Returns
- Income Verification and Calculation
- How to Read a W-2
Lesson Excerpt
FORMULA FOR CALCULATING SALARIED OR HOURLY WITH OVERTIME
- Take the year to date (YTD) earnings from current pay-stub
- Add the prior years earning from w-2 or VOE
- Subtotal
- Add the earnings from 2 years prior, from w-2 or VOE
- Divided by the number of months calculated. If you averaged 3 months to date, plus an additional 24 months, you will now divide by 27 months.
- In the example above, divide by 27 months to arrive at your monthly average.
