Introduction
When it comes to taxes, many of us dread the thought of going through the process. Whether it’s preparing our own taxes or relying on a professional to do it, there’s always a level of confusion and uncertainty. One of the most common sources of confusion is the IRS tax form W-2. This is the form that your employer sends you every year and it documents your earnings and tax withholdings. In this article, we’ll demystify the form W-2 and hopefully make the tax season a little less daunting.
What is Form W-2?
Form W-2, Wage and Tax Statement, is a form that employers are required to file with the Social Security Administration (SSA) and provide a copy to each of their employees. The W-2 reports an employee’s annual earnings, including taxable wages, tips, and other types of compensation, as well as any tax withholdings taken out of the employee’s paycheck throughout the year.
What Information is Included on Form W-2?
The form W-2 is broken down into several sections, each of which provides important details about your earnings, tax withholdings, and benefits. Here’s what you can expect to find on your W-2:
Box 1 – Wages, Tips, and Other Compensation
This box shows the total amount of taxable compensation you received during the year, including your salary, wages, and tips.
Box 2 – Federal Income Tax Withheld
This box shows the total amount of federal income tax that was withheld from your paycheck during the year.
Box 3 – Social Security Wages
This box shows the total amount of wages subject to Social Security taxes. This includes your gross wages, tips, and other compensation.
Box 4 – Social Security Tax Withheld
This box shows the total amount of Social Security taxes that were withheld from your paycheck during the year.
Box 5 – Medicare Wages and Tips
This box shows the total amount of wages and tips subject to Medicare taxes.
Box 6 – Medicare Tax Withheld
This box shows the total amount of Medicare taxes that were withheld from your paycheck during the year.
Box 7 – Social Security Tips
This box shows the total amount of tips that you reported to your employer that were subject to Social Security taxes.
Box 8 – Allocated Tips
This box shows the amount of allocated tips that were reported to your employer.
Box 9 – Blank
This box is not used.
Box 10 – Dependent Care Benefits
This box shows the total amount of dependent care benefits that you received from your employer during the year.
Box 11 – Nonqualified Plans
This box shows the total amount of distributions from nonqualified deferred compensation plans.
Box 12 – Codes
This box shows a series of codes and their corresponding amounts that relate to various types of compensation, benefits, and tax withholdings.
Box 13 – Checkboxes
This box includes four checkboxes that indicate if you participated in certain types of retirement plans, received third-party sick pay, were a statutory employee, or received tips.
Box 14 – Other
This box provides additional information about your compensation that is not included in the other boxes.
Box 15 – State and Employer’s State ID
This box shows your employer’s state ID number and the state where you worked.
Box 16 – State Wages, Tips, Etc.
This box shows the total amount of wages, tips, and other compensation that is subject to state income tax.
Box 17 – State Income Tax
This box shows the total amount of state income tax that was withheld from your paycheck during the year.
Box 18 – Local Wages, Tips, Etc.
This box shows the total amount of wages, tips, and other compensation that is subject to local income tax.
Box 19 – Local Income Tax
This box shows the total amount of local income tax that was withheld from your paycheck during the year.
Box 20 – Locality Name
This box shows the name of the locality where you worked.
What should I do with Form W-2?
When you receive your W-2 from your employer, you should review it to ensure that the information is correct. If you notice any errors, such as incorrect name, Social Security Number, or income amounts, contact your employer and request a corrected W-2.
You’ll need your W-2 in order to file your taxes with the IRS, so make sure to keep it in a safe place until you’re ready to file.
Frequently Asked Questions (FAQs)
1. When will I receive my W-2?
Employers are required to provide W-2s to their employees by January 31st each year.
2. Can I get my W-2 online?
Many employers allow employees to access their W-2 online through their payroll system. Check with your employer to see if this option is available to you.
3. What if I lost my W-2?
If you lose your W-2, contact your employer and request a new copy. If you are unable to obtain a copy from your employer, you can request a wage and income transcript from the IRS.
4. Can I file my taxes without a W-2?
It’s possible to file your taxes without a W-2 if you know your total earnings and tax withholdings for the year. However, having the W-2 makes the filing process much easier and accurate.
5. What if my W-2 is incorrect?
If you notice any errors on your W-2, such as incorrect earnings or tax withholdings, contact your employer and request a corrected W-2.
6. Is my employer required to send me a W-2?
Yes, all employers are required to provide W-2s to their employees.
7. Do I need to attach my W-2 to my tax return?
No, you do not need to attach your W-2 to your tax return. However, you should keep it in a safe place in case the IRS requests a copy.
8. What if I worked for multiple employers in the same year?
If you worked for multiple employers in the same year, you’ll receive a separate W-2 from each employer.
9. What if I moved during the year?
If you moved during the year and your employer has multiple locations, the state and local taxes withheld may be different depending on the location. Make sure each W-2 reflects the state and local taxes withheld for the location where you worked.
10. Do I need to file a W-2 with my state?
No, your employer is responsible for filing your W-2 with the appropriate state agency.
Conclusion
Form W-2 can seem overwhelming at first, but with a little bit of understanding, it becomes much less daunting. By breaking down the information into different sections, you can get a clear picture of your annual earnings and tax withholdings. Remember to keep your W-2 in a safe place and review it carefully for accuracy. And if you have any questions or concerns, don’t hesitate to contact your employer or a tax professional for assistance.
