The prospect of doing taxes and filling out forms terrifies you, but you’d like to understand the W-2 form better.
A W-2 tax form is something that employers must prepare for their employees. Its purpose is to give each employee information that they must include in their income tax form. It also allows the IRS and Social Security Administration to confirm the employee’s income tax return.
What does the W-2 form tell you? Find out more below.
What’s a W-2 Form?
In short, a W-2 tax form indicates the amount of taxes withheld from an employee’s paycheck for the year. It’s used to file federal and state taxes.
The IRS asks employers to report the salary information of their employees on Form W-2. Additionally, the W-2 form reports the amount of state, federal, and any other taxes withheld from paychecks.
What’s the Purpose of a W-2 Tax Form?
If you’re an employee, your W-2 form is essential to prepare your tax return. The IRS requires your W-2 to be sent to you before January 31 in order to give you enough time.
Who Can Get a W-2 Form?
Only employees can receive a W-2. Independent and self-employed workers should use a Form 1099 rather than a W-2.
What Does a W-2 Look Like?
Form W-2 is divided into boxes used to report items pertaining to your income. Box 1 features your annual wage and salary payments, while box 2 shows the amount of federal tax withheld from it.
Box 3 shows the portion of your income that is subject to the Social Security tax. Other boxes include the Social Security taxes that are withheld, your income subject to Medicare tax, and your state income tax withholding.
How to Get a W-2?
It is now possible to get a W-2 form online. Create W2 in a minute thanks to online programs.
Tax Withholding
The IRS requires employees to make regular payments throughout the year. The amounts your employer withholds from your paycheck are sent periodically to the IRS to take care of those payments for you.
When you calculate your tax for the year, you should subtract the amount withheld by your employer on the W-2 from your tax bill. This will tell you whether to make an additional tax payment or expect a refund.
The IRS will check that the income reported on your taxes matches the information on your W-2. The IRS will also verify that the reported payment amounts match your employer’s corporate tax return.
Attaching a Copy
Don’t forget to always attach a copy of your W-2 when getting ready to file your tax returns by mail. If you do it online, your W-2 information is sent together with your tax return.
What Does the W-2 Form Tell You?
You now know the answer to the question: “What does the W-2 form tell you?”
It’s a form that an employer gives to their employees. It shows all the salary information of the employee with the amount of taxes withheld. The information on the W-2 allows you to prepare your tax return.
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