What is a W-2 form? Here’s how to read it and file your taxes correctly

The IRS Form W-2 is one of the most important papers you need to file your federal tax return. What is written on your W-2 can decide if you will get a tax refund or owe tax money. The IRS officially calls the W-2 the “Wage and Tax Statement.” The W-2 shows how much money you earned in one tax year and how much tax was already taken out.

It tracks income tax, Social Security tax, and Medicare tax taken from your pay, as reported by Yahoo Finance. Because it shows taxes you already paid, the W-2 is very important for filing your return correctly. The W-2 may also show other benefits like health insurance, retirement plans, HSA money, and dependent care benefits. Your employer must send your W-2 to you and to the IRS, usually by January 31 each year.

Employers who issue 10 or more W-2s must file them online with the IRS. You may hear about Copy A, B, C, and Copy 2, but they are just copies of the same form.

• Copy A goes to the IRS from your employer.
• Copy B is for you to send with your tax return.
• Copy C is for your personal records.

Copy 2, if included, shows state or local tax details. Employers send Form W-3 to the Social Security Administration for all workers who get a W-2. Even though your employer sends your W-2, you must also use it when you file your own taxes.

Who gets a W-2 form?

Anyone who works for an employer and earns money gets a W-2. If you earned $600 or more in one year, your employer must give you a W-2. If you changed jobs or worked more than one job, you will get multiple W-2s, as stated by Yahoo Finance. Freelancers, gig workers, and independent contractors do not get W-2s. These workers usually receive Form 1099 instead. This is because taxes are not automatically taken out of their pay.

How to read a W-2 form (box by box)

The top section (Boxes A-F) shows your name, address, and Social Security number. It also shows your employer’s name, address, and ID number. A control number may appear, which is just for the employer’s records.

• Box 1 shows your total taxable wages and pay.
• Box 2 shows how much federal income tax was taken out.
• Box 3 shows wages subject to Social Security tax.
• Box 4 shows Social Security tax withheld.
• Box 5 shows wages subject to Medicare tax.
• Box 6 shows Medicare tax withheld.
• Box 7 shows tips you reported that are taxed.
• Box 8 shows allocated tips, meaning tips your employer added for tax reasons.
• Box 9 is usually empty because the credit no longer exists.
• Box 10 shows dependent care benefits paid by your employer.
• Box 11 shows deferred compensation, usually for executives.
• Box 12 shows things like 401(k) or HSA contributions.
• Box 13 shows if you were a statutory employee, had a retirement plan, or got sick pay.
• Box 14 shows extra items like union dues or disability insurance.
• Boxes 15-20 show state and local tax details, if applicable.

These boxes may be blank if your state or city does not require withholding.

What if your W-2 is missing?

If you don’t receive your W-2 by the end of January, contact your employer first. If it is still missing by the end of February, contact the IRS. The IRS can request the form for you and provide a substitute form.

What if your W-2 is wrong?

Employers sometimes send W-2s with mistakes like wrong pay amounts or spelling errors. If there is an error, ask your employer for a corrected W-2, stated by Yahoo Finance. Errors can cause problems and may even lead to fines for employers. Filing with incorrect W-2 information could trigger an IRS audit.

The IRS allows a special form if a corrected W-2 is delayed. If too much tax was withheld, the IRS will send you a refund. To avoid big refunds or bills next year, adjust your withholding with your employer.

If you don’t get your W-2 by January 31, check online or ask your employer. If your employer does not respond, call the IRS at 800-829-1040. A W-2 shows what you earned and what tax was taken out. A W-4 tells your employer how much tax to withhold from your pay, as per the report by Yahoo Finance. If you earn more than $600, you should get a W-2 from your employer.

Freelancers and gig workers do not get a W-2. They get Form 1099. Employers send W-2 forms, but workers must also use them when filing taxes. Even if you earn less than $600, the IRS says you should still report that income. A W-2 shows how much money you earned and how much tax was taken out. Reading your W-2 carefully helps you file taxes right and avoid problems.

FAQs

Q1. What is a W-2 form used for?

A W-2 form shows how much money you earned and how much tax was already taken out to help you file your taxes.

Q2. When should I get my W-2 form from my employer?

Most employers must send your W-2 by January 31 each year.