What is a W-2 Form?

A W-2 tax form is needed to submit your federal and state taxes and indicates the amount of taxes deducted from your paycheck for the year. Here are the fundamentals.

Employers are required by the IRS to provide pay and compensation information for their workers on Form W-2. The amount of federal, state, and any taxes taken from your paycheck is also reported on your W-2.

When completing your tax return as an employee, the information on your W-2 is critical. To ensure that you get it on time, the IRS mandates that your employer give you a W-2 no later than January 31 after the end of the tax year, which is normally December 31. Learn more about how can I get my w2 online for free?

If you are an employee, you should only obtain a W-2. The job you undertake as an independent contractor or self-employed person may be the same as that of an employee, but you will get an earnings statement on a Form 1099 rather than a W-2.

The W-2 form is split by boxes that record different income-related data. Your yearly income and salary payments are shown in box 1 of the W-2, together with the amount of federal tax withheld in box 2.

Because only a percentage of your income is subject to the Social Security tax, box 3 may indicate an amount less than your total salary for the year. Other boxes on the W-2 form contain information on your Medicare tax withholding, Social Security taxes withheld, and, if appropriate, information on your state income tax withholding.

The significance of your tax withholding

When your employer withholds federal income taxes from your paycheck, those amounts are remitted to the IRS throughout the year and reported on your w2 form. Get a copy of my w2 online.

You may not know it, but in most circumstances, you cannot pay your whole tax amount until the filing date. Everyone is required by the IRS to make periodic payments throughout the year; however, your employer handles this for you.

When you file your federal return and compute your tax for the year, you must deduct the withholding amount reported by your employer on the W-2 from your tax bill. Once you’ve completed this computation, you’ll know whether you’re due a refund or an extra tax payment. If you submit a state income tax return, you must do the same computation for the amount withheld to pay your state income taxes.

Confirming your identity and Social Security number

The W-2’s identifying information section is basically a tracking function. The IRS will want to know why the income you report on your taxes does not match the information on your W-2. Similarly, the IRS will verify the stated payment amounts against your employer’s corporate tax return.

Most significantly, since the IRS gets a copy when W2s come out, it already knows whether you owe tax and may contact you if you do not submit a tax return. If the name or Social Security number on your W-2 is incorrect, you should notify your employer right away so that it may be corrected.

Including your W-2

When you finalize your tax forms and prepare to submit them, keep in mind that you must always include a copy of your W-2. If you use TurboTax to e-file your taxes, your W-2 information is submitted along with your tax return. If you file your tax return by mail, you must include a copy on the front of your return.