Final answer:
Box 1 of Form W-2 includes the value of group-term life insurance coverage in excess of $50,000 and allocated tips but excludes elective deferrals into a Section 125 plan and deferred compensation plans like 401(k)s.
Step-by-step explanation:
Form W-2, Box 1, titled 'Wages, tips, other compensation', reports various forms of income to the Internal Revenue Service (IRS). This includes regular wages, tips earned, and some other forms of compensation. It's important to note what is included and excluded from this box to properly report and understand your income for tax purposes. Option A, the value of group-term life insurance coverage in excess of $50,000, is included in Box 1 as it is taxable income over that threshold. Option B, elective deferrals into a Section 125 (cafeteria) plan, are not included in Box 1 as these are pre-tax deductions. Option C, allocated tips, should indeed be included in Box 1 as they are a form of taxable income earned by the employee. Finally, Option D, elective deferrals into a deferred compensation plan, such as a 401(k), are not included in Box 1 because these are pre-tax contributions.