What is W-2 Form? A starting point for filing taxes.

If you’ve ever been an American employer or employee, you may have completed or at least seen the w-2 form. This is because this form is being used by the Internal Revenue Service (IRS) to assist in estimating tax withholding.

If you earn taxable wages or compensation over $600, you must receive a W-2. Employers must send it by mail or electronically, or by January 31st.

IRS refers Form W-2 as wage and tax statements. This document summarizes income for the tax year and tracks withholding income, Social Security and Medicare taxes. W-2 records the amount of tax you have already paid, so it’s an important document to have to complete your federal tax return

In addition to reporting how much an employer has been withheld in payroll taxes, sometimes known as FICA taxes, W-2 also provides the following information on employer-provided health insurance, retirement, health savings account contributions, and dependent care. Provides tax reports on benefits and other compensation. more.

Your employer must send you and the IRS a tax W-2 form. Employers with 10 or more Forms W-2 are required to electronically file information returns on the IRS. You can hear some confusing jargon about copies of W-2 form A, B, and C, but this refers to duplicates of the same form.

Copy A is for your employer to submit to the IRS, Copy B is Copy B for submitting your tax return, and Copy C is the tax information in the record. Withholds state, city or local income tax, including copy 2 of the W-2 form.

Employers are also responsible for submitting Form W-3 Social Security Tax (SSA) W-2 employees were determined and benefited.

Employers will file a W-2 associated with a Social Security number with the IRS, but they are also responsible for including copies on individual tax returns.

read more: How to determine tax withholding to avoid surprises

Looking at the W-2 form, you really don’t know what you’re looking at? With 20 different information, there are many things that overwhelm the average taxpayer. This is what you have in each box Current Form W-2 Wages and Tax Statements.

At the top of the W-2 form you will find the employee’s name, address and Social Security number. This is listed along with the employer’s address and the employer’s identification number or employer’s state ID number, where applicable.

There is also a box with a control number. This refers to the numbers assigned by the employer to the system.

Boxes 1 and 2

Box 1 shows taxable income, including gross wages and other compensation. Box 2 shows federal income tax withholding for that year.

Boxes 3 and 4

These boxes are all about Social Security, including the purpose of Social Security and the amount of income taxable to the amount of Social Security tax.

Boxes 5 and 6

These boxes on W-2 show how much of your wages are subject to Medicare tax, and how much Medicare tax you withheld.

Boxes 7 and 8

These two boxes are for extras acquired, including hints, which are subject to the Social Security Tax in Box 7 and hints assigned to Box 8. IRS defines Tips assigned as “amount allocated to employers assigned to the employer in addition to the tips you reported.”

Boxes 9 and 10

If you don’t see anything in box 9, don’t worry. It was a tax credit area that no longer existed. Box 10 reports how much they receive from their employers in their dependency care benefits.

Boxes 11 and 12

Box 11 has a confusing language Unqualified planshowever, this usually refers to the deferred rewards offered to executives. Box 12 shows other types of coverage, such as 401(k) and contributions to health savings accounts.

Boxes 13 and 14

This line is a catch-all of information that cannot be fitted anywhere else. Box 13 has three small boxes for reporting withholding from employer-sponsored retirement plans or sick wages. Box 14 is for all leftovers, including national disability insurance, union membership fees, health insurance premiums and more.

At the bottom of the W-2 form, there may be additional boxes that reflect state tax information, such as state income tax and local income tax withholding. If your state or local government does not provide automatic withholding or require automatic withholding, these boxes may be left blank.

read more: Free Tax Return: How to file a 2024 return for free

If there is a mistake in W-2, such as an incorrect amount or a spelling name, point out the error from your employer and ask for the corrected form. It may take time and effort, but if it involves a significant amount of money or major mistakes, the IRS can be fined on your employer.

It’s also worth waiting for the revised form for your own peace of mind. It could trigger an IRS audit if the taxable income of a federal or state return does not match what is on Form W-2. The IRS has instructions to fill out a Supplementary Form If you do not obtain the revised W-2 before the tax return deadline.

If the W-2 withholding exceeds the annual tax obligation, the IRS will issue a refund. However, if you don’t wait until tax season to get your next money back, work with your employer to revise and adjust withholding.

Employers must mail the W-2 by January 31st, but that doesn’t mean they will receive it by then. Wait until mid-February before following up to see if your copy is accessible online or through HR.

If you don’t have a W-2 form by the end of February and your employer is not responding, you can contact the IRS. 800-829-1040. They follow up with your employer and send it to you Alternative Forms To fill out the taxes so that you can complete them.

2. What is the difference between W-2 tax form and Form W-4?

W-2 and W-4 forms are easy to confuse, but W-2 is a form where your employer reports how much you earn and how much you have withheld for federal and state tax purposes. . Form W-4 is a form that tells the employer the amount of withholding tax.

W-4 also mentioned by the IRS Employee withholding certificatemarriage status, number of children you have, and other information, tell the company or small business you work for about how much you want to withhold for taxes.

All employees with taxable wages or compensation in excess of $600 must receive a W-2. Some employees may even receive some W-2 if they do multiple jobs during the calendar year.

The exception to this rule are self-employed, such as independent contractors, gig workers, and freelancers. Unless they are defined as Legal employeethese workers receive a Form 1099 Instead of W-2 form. They do not withhold federal income taxes, so these taxpayers can use 1099 to calculate their taxable income and estimate their remaining tax liability.

read more: How does self-employment tax work? Step-by-step guide

It is your employer’s responsibility to file a W-2 (and W-3) with the IRS and Social Security Administration, but you must file it on your federal and state tax returns. The exception is that for under $600, the IRS does not require a W-2, but encourages taxpayers to report their income.

Independent contractors and freelancers file Form 1099 instead of Form W-2.