What Is A W-2 Form? Everything You Need To Know

What Is A W 2 Form? Everything You Need To Know
Doug Whiteman

If you’re an employee, Form W-2 is one of the most important forms you’ll receive at tax time. It includes information about the income and benefits you received during the tax year, so you’ll need it when preparing your tax return. With that in mind, here’s a breakdown of what a W-2 form is and how it works.

What Is Form W-2?

Also known as a “Wage and Tax Statement,” Form W-2 is a document that reports your annual wages and the amount of taxes withheld from your paycheck and sent to the IRS. It also shows other information such as how much your employer paid for your health insurance and any money you received in dependent care benefits.

Employers are required to send matching copies of this document to each of their employees and to the Social Security Administration (SSA) at the end of every tax year. As an employee, you’ll use this form to prepare your tax return. If you’ve worked multiple jobs during the year, you’ll enter each W-2 form separately.

The total amount of taxes withheld from your paychecks reduces your total tax liability. If the total amount withheld from your paychecks is greater than the total amount you owe, you’ll get a tax refund. The opposite is true, too. If your employer hasn’t withheld enough taxes, then you may owe the IRS.

Keep in mind that the IRS uses a cross-checking program to ensure you report all of your W-2 income. If the amount reported from your W-2s doesn’t match the amount on your tax return, the IRS may delay your tax return.

Who Is Responsible for Filing Form W-2?

Employers must file Form W-2 and provide employees with copies. Employers must provide W-2s to their workers no later than Jan. 31 each year, either by mail or electronically. The deadline should leave you plenty of time to file your return by the annual tax deadline, which is typically April 15.

That said, if you don’t receive your W-2 form during that window, it’s your responsibility to make sure you get a copy and file your return on time.

Here are some steps you can take to ensure that happens:

  • Ask your human resources department or employer. More often than not, a missing W-2 form is a result of a clerical error. Verify the information your employer has on file for you, particularly your mailing and/or email address.
  • Contact the IRS. If your employer is unable to help you, then you can request your wage and income transcript from the IRS. You can request a copy of your transcript by using the IRS Get Transcript tool or calling 800-908-9946. Requesting a copy online will be faster than receiving one by mail.
  • File an extension. If Tax Day is on the horizon and you still don’t have your W-2 form in hand, think about filing for an extension while you wait for it to arrive.
  • Estimate your income and withholdings on your return: If you’re unable to file an extension or get a copy of your W-2 in time to file your tax return, consider estimating your income and withholdings and filing your taxes using Form 4852. You can amend the return once you receive the proper paperwork.

How Do I File a W-2 With My Taxes?

When preparing your taxes, enter the information from your W-2 form onto your income tax return (Form 1040). You can do so either electronically or by hand. Many of the best online tax preparation tools allow you to import this information directly from your payroll provider.

How To Read Form W-2

Now that you know more about what a W-2 form is and how it works, the next step is learning how to read it from start to finish. Here’s an explanation of each of the boxes on the form.

  • Boxes A to F: Provide information about you and your employer, including the name and address of the employer, your employer’s EIN and state ID, and your Social Security number.
  • Box 1: Shows the total amount of income you received through wages, tips or other forms of compensation.
  • Box 2: Shows how much federal income tax was withheld from your pay.
  • Box 3: Shows how much of your wages is subject to Social Security tax.
  • Box 4: Shows how much Social Security tax was withheld from your pay.
  • Box 5: Shows how much of your wages is subject to Medicare tax.
  • Box 6: Shows how much Medicare tax was withheld from your pay.
  • Box 7: Shows any tip income you reported to your employer that’s subject to Social Security tax.
  • Box 8: Shows tip income that was allocated to you by your employer.
  • Box 9: Box 9 should be blank. It deals with a tax perk that’s no longer in use.
  • Box 10: Reports how much you’ve received in dependent care benefits.
  • Box 11: Shows how much money was distributed to you from your employer’s taxable deferred compensation plan.
  • Box 12: Shows miscellaneous forms of income you’ll report to the IRS, such as 401(k) contributions. Each type of income has its own code, and they’re detailed in the IRS Form W-2 instructions.
  • Box 13: This box is designed to report pay that is not subject to withholding for federal income tax, such as contributions to employer-sponsored retirement plans.
  • Box 14: This box serves as additional space for any information that may not fit elsewhere in the form, including union dues or disability insurance costs withheld.
  • Boxes 15 to 20: Show state tax information, including how much of your pay is subject to state income tax and the total amount that’s withheld.
  • FAQs (Frequently Asked Questions)

    How much money do I need to make to get a W-2?

    Generally, you can expect to receive a W-2 either electronically or by mail if you earned at least $600 from a particular employer. However, if your employer withholds any amount of tax from your paycheck, you will receive this form.

    What should I do if I’ve lost my W-2?

    The best thing to do is to contact your employer or human resources department and ask them to issue you another copy. However, barring that, you can also receive a copy by calling the IRS and asking them for assistance.

    What’s the difference between a W-2 and a W-4?

    While both of these forms are required by the IRS, Form W-4 is filled out by the employee and tells your employer how much tax you would like withheld from your paycheck. On the other hand, Form W-2 shows the IRS your total earnings during the tax year.

    What’s the difference between a W-2 and a 1099?

    A W-2 form is used to report income for employees who have taxes withheld from their paychecks by their employers. On the other hand, a 1099-NEC is used to report income for independent contractors who are responsible for covering their own employment taxes.

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