Every year, employers must provide their employees with IRS tax form W-2, which is a summary of the employee’s earnings and withholdings from the previous year. This form is used to file individual federal tax returns. Understanding what is included on a W-2 form and how to read and interpret it is important for every employee, so let’s dive in and explore the details.
What is a W-2 Form?
A W-2 form is a document that summarizes an employee’s earnings and withholdings from the previous year. Employers are required by the Internal Revenue Service (IRS) to provide all their employees with a W-2 form by January 31st each year. Employees use this form to help them file their individual federal income tax returns, as it provides them with the necessary information required.
What Information Does a W-2 Form Contain?
A W-2 form contains a lot of detailed information, including:
- The employee’s name, address, and social security number
- The employer’s name, address, and identification number (EIN)
- The wages the employee earned for the year
- The amount of federal, state, and local taxes withheld from the employee’s paycheck
- The amount of Social Security and Medicare taxes withheld from the employee’s paycheck
- The amount contributed to the employee’s retirement account, if applicable
- Other miscellaneous deductions or contributions, such as health insurance or life insurance premiums
How to Read and Interpret a W-2 Form?
Reading and interpreting a W-2 form can be overwhelming, but it’s important to understand what each section means to ensure that it is correct and accurate. Below are the different sections you’ll find in a standard W-2 form and what each section means.
Box a: Employee’s Social Security Number
This box contains the employee’s social security number. This number is used to identify the employee with the IRS.
Box b: Employer Identification Number (EIN)
This box contains the Employer Identification Number (EIN), which is a unique identifier assigned by the IRS to businesses. This number is used to identify the employer with the IRS.
Box c: Employer Name, Address, and ZIP Code
This box contains the name, address, and ZIP code of the employer.
Box d: Control Number
The control number is a unique identifier that the employer assigns to the W-2 and is used to keep track of the forms.
Box e: Employee Name, Address, and ZIP Code
This box contains the name, address, and ZIP code of the employee.
Box 1: Wages, Tips, and Other Compensation
This box shows the employee’s total taxable wages, tips, and other compensation that they earned during the year.
Box 2: Federal Income Tax Withheld
This box shows the total amount of federal income tax that was withheld from the employee’s paychecks by the employer throughout the year.
Box 3: Social Security Wages
This box shows the total amount of the employee’s wages that are subject to Social Security tax.
Box 4: Social Security Tax Withheld
This box shows the total amount of Social Security tax that was withheld from the employee’s paychecks by the employer throughout the year.
Box 5: Medicare Wages and Tips
This box shows the total amount of the employee’s wages and tips that are subject to Medicare tax.
Box 6: Medicare Tax Withheld
This box shows the total amount of Medicare tax that was withheld from the employee’s paychecks by the employer throughout the year.
Box 7: Social Security Tips
This box shows the total amount of tips that the employee reported to their employer during the year. This amount is subject to Social Security tax.
Box 8: Allocated Tips
This box shows the total amount of tips that the employer allocated to the employee, which is their share of tips reported by coworkers. This amount is also subject to Social Security and Medicare taxes.
Box 10: Dependent Care Benefits
This box shows the total amount of tax-free dependent care benefits that the employee received during the year.
Box 12: Other Compensation
This box shows the total amount of other taxable compensation that the employee received during the year, such as bonuses or stock options. There may be multiple codes listed in Box 12 to indicate different types of compensation.
Box 13: Statutory Employee
This box indicates whether the employee is considered a statutory employee, which means they are treated as self-employed for Social Security and Medicare tax purposes.
Box 14: Other
This box can contain any additional information that the employer wants to include. Some common codes that may appear in Box 14 may include union dues, educational assistance, or employer-paid health insurance premiums.
Box 15-20: State and Local Taxes
These boxes show the total amount of state and local taxes that were withheld from the employee’s paychecks, as well as the employee’s identification number and the state where the taxes were paid.
FAQs
1. What is the deadline for employers to send out W-2 forms?
Employers must provide their employees with a W-2 form by January 31st each year.
2. Do I need to attach my W-2 form to my tax return?
No, you don’t need to attach your W-2 form to your tax return, but you do need to use the information on it to complete your tax return accurately.
3. What should I do if I haven’t received my W-2 form?
If you haven’t received your W-2 form by February 15th, you should contact your employer to request a copy.
4. What should I do if I notice an error on my W-2 form?
If you notice an error on your W-2 form, you should contact your employer to have it corrected. You may also need to file an amended tax return.
5. Can I file my tax return without my W-2 form?
You can estimate the information on your tax return based on your last paycheck of the year if you haven’t received your W-2 form yet. However, it’s best to wait until you have the actual form before filing to avoid any errors or discrepancies.
6. How long should I keep my W-2 form?
You should keep your W-2 form for at least three years in case you need to refer back to it in the future.
7. Can I access my W-2 form online?
Some employers may offer online access to your W-2 form through a secure portal. Check with your employer to see if this option is available to you.
8. What is the difference between a W-2 form and a 1099 form?
A W-2 form is used by employers to report an employee’s earnings and withholdings, while a 1099 form is used by companies to report payments made to independent contractors.
9. What should I do with my copy of the W-2 form?
You should keep your copy of the W-2 form for your records, but you do not need to include it with your tax return.
10. Can I file my tax return if I lost my W-2 form?
Yes, you can still file your tax return if you lost your W-2 form. You can request a copy from your employer or the Social Security Administration if needed.
Conclusion
Understanding your W-2 form is an important part of filing your taxes accurately. By following this definitive overview, you should have a clear understanding of what information is contained on the form and how to read and interpret it. Remember that if you have any questions or notice any errors on your W-2 form, you should contact your employer to have it corrected before filing your tax return.
