Tax season can be stressful, but understanding key tax forms, such as Form W-2, can make filing your taxes more manageable. Employers are required to send out W-2s to their employees by January 31st each year (or the next business day if the 31st falls on a weekend or holiday). If you haven’t received your W-2 by mid-February, contact your employer immediately. You cannot file your taxes until you receive this crucial document.
Form W-2 provides the IRS with information about your income, taxes withheld, and other financial details necessary to complete your tax return. It is an essential part of the tax filing process.
What Is Form W-2?
Form W-2, also known as the Wage and Tax Statement, is an annual statement that your employer provides to you and the IRS. It reports your taxable income, Social Security and Medicare contributions, and the taxes withheld from your pay.
The information on Form W-2 is shared with federal and state tax authorities to determine how much tax you owe or are eligible to receive as a refund.
Reading Form W-2
Reading a W-2 can be intimidating if you’re unfamiliar with its structure. Here’s a breakdown of the key components of Copy B of Form W-2, which you’ll file with your tax return:
- Boxes A - F: These include your Social Security number, your employer’s identification number (EIN), and contact information for both you and your employer.
- Box 1: Displays your total taxable income and other taxable compensation for the year.
- Box 2: Indicates the amount of federal income tax withheld from your pay.
- Box 3: Lists the amount of your earnings subject to Social Security tax.
- Box 4: Shows the Social Security tax withheld, calculated at a rate of 6.2%. The wage base limit is $160,200, resulting in a maximum contribution of $9,932.40.
- Box 5: Reports your earnings subject to Medicare tax.
- Box 6: Displays the Medicare tax withheld. Both employees and employers pay 1.45% of your wages, for a total of 2.9%. High earners with wages exceeding $200,000 pay an additional 0.9%, which is the employee’s responsibility.
- Box 7: Tips you reported to your employer.
- Box 8: Tips your employer allocated to you.
- Box 9: No longer used—left blank.
- Box 10: Shows the amount provided for dependent care assistance.
- Box 11: Reports deferred compensation from non-qualified plans.
- Box 12: Includes specific codes for reimbursements, non-taxable sick pay, and employer-provided adoption benefits.
- Box 13: Checkboxes indicating:
- Statutory employee status.
- Participation in a retirement plan.
- Receipt of third-party sick pay.
- Box 14: A miscellaneous field for items like non-taxable income, union dues, or health insurance premiums.
- Boxes 15 - 20: Contain state and local tax information, including:
- Employer’s state ID number.
- State wages, tips, or commissions.
- State income tax withheld.
- Local wages, tips, or commissions.
- Local income tax withheld.
- Locality name.
Copy 1 of Form W-2 must also be attached to any applicable state, city, or local tax returns.
Filing Form W-2
You should receive Form W-2 by January 31st. If you haven’t received it by mid-February, reach out to your employer. Once you have your W-2, you can file your tax return using Form 1040, along with any other financial and tax documents.
Conclusion
By understanding Form W-2 and reviewing it carefully, you can ensure accurate tax filing and avoid unnecessary delays. If you have questions about any part of your W-2, consult your employer or a tax professional.