How to Read Form W-2 Wage and Tax Statement
A Form W-ii is more than merely a piece of paper; it'due south one of the most important records you demand at tax time. Here's what a Westward-2 is, how to empathise what'southward on it and how to get your W-2.
What is a Grade Westward-ii?
IRS Form W-2, the "Wage and Tax Argument," reports an employee'due south income from the prior yr, how much revenue enhancement the employer withheld and other information. Employers send employees a Course Due west-2 in January (a copy also goes to the IRS). Employees use Class Westward-2 to prepare their tax returns.
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Your Form W-2 tells you how much you earned from your employer in the by yr and how much withholding taxation y'all've already paid on those earnings. For many people, the information on the W-ii determines whether they're getting a refund or writing a cheque at revenue enhancement time.
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Yous should receive a W-2 from every employer that paid y'all at to the lowest degree $600 during the year. Tip income may be on your W-two. Freelancers or independent contract workers get 1099 southward from their clients, non Westward-2s.
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Don't confuse a W-2 with a W-iv — that's the form you use to tell your employer how much taxation to withhold from your paycheck every pay flow ( acquire how withholding taxes work ).
How do I get my Form W-ii?
If your W-2 for the current year doesn't evidence upward in the mail by Valentine's Twenty-four hours, first enquire your employer for a re-create and make sure it's got the right address. Your employer may also tell yous how to get your West-2 online from the HR department or payroll processor. If that doesn't prepare things, call the IRS ( here'southward a list of useful IRS telephone numbers ). You'll need to provide data well-nigh when you worked and an approximate of what you lot were paid.
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Recollect that your tax render is yet due by the taxation-filing deadline , then if you don't have your West-ii, you might need to estimate your earnings and withholdings to get information technology washed on time. ( Go here to learn more about getting an extension .) The IRS might delay processing your return — read: refund — while it tries to verify your data.
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If your West-2 finally shows up after yous already filed your tax return, you lot might demand to go back and better your tax return .
Nerdy tip: If y'all're looking for a copy of an one-time W-2 that y'all attached to a prior revenue enhancement render and you can't get a copy from the employer that originally issued it, you can request an IRS tax transcript online or use IRS Form 4506 to request a copy of your tax return.
When should I receive my Form W-2?
The IRS requires employers to furnish Westward-2s to the government and employees by Jan. 31 or face up penalties. The IRS by and large defines furnish as "get it in the postal service," which means you lot should have yours in paw by the first week of February. Employers tin can besides send employees their W-2s electronically, just it's not required. That ways yous may be able to become yours online.
Even if you quit your job months ago, your ex-employer can still expect until January. 31 to send you a West-ii — unless you ask for it earlier, in which case the employer has 30 days to provide it.
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How a Form Due west-2 works
Yous employ the West-2 to file your revenue enhancement return. Form Westward-2 shows more than just what you were paid. It too details how much you contributed to your retirement programme during the yr, how much your employer paid for your health insurance, or fifty-fifty what you received in dependent care benefits. All of that data affects your tax picture — your retirement contributions might not exist taxable , for example.
Box 1: Details how much you were paid in wages, tips and other bounty.
Box 2: Shows how much federal income revenue enhancement was withheld from your pay.
Box iii: Shows much of your pay in Box 1 was subject area to Social Security taxation.
Box 4: Shows how much Social Security taxation was withheld from your pay.
Box 5: Shows much of your pay in Box 1 was subject to Medicare tax.
Box six: Shows how much Medicare taxation was withheld from your pay.
Box 7: Shows how much of the tip income you reported to your employer (those tips are included in Box one ) was subject to Social Security taxation.
Box 10: Shows the amount of dependent care benefits your employer paid to y'all or incurred on your behalf. Notation: Generally, anything over $five,000 ($2,500 if you lot're married by filing separately) is detailed in B ox 1 as well. For the 2021 tax yr (taxes due in April 2022), the American Rescue Plan Act permits employers to increase this amount to $10,500 ($5,200 for married filing separately).
Box xi: Generally, this box shows how much money was distributed to you during the twelvemonth from your employer's deferred compensation program.
Box 12: Here, there are four areas in which the employer can provide more detail nearly some or all of the pay reported in Box one. For example, if you've contributed to your company's 401(chiliad) plan, the amount of your contributions might bear witness up in Box 12 with the code letter of the alphabet "D." There are many codes, which you tin come across in the IRS's West-ii instructions .
Box 13: This box indicates whether your earnings are bailiwick to Social Security and Medicare taxes but aren't discipline to federal income revenue enhancement withholding, whether you participated in certain types of retirement plans, or whether yous got certain kinds of ill pay.
Boxes xvi-19: Bear witness how much of your pay is subject to country income tax, how much land income tax was withheld from your pay, how much income was bailiwick to local taxes, and how much local tax was withheld from your pay.
What to exercise if your Westward-two is wrong
If your employer leaves out a decimal point, gets your proper noun or a dollar amount incorrect, or checks the wrong box — it happens — signal out the mistake and inquire for a corrected Due west-2. Pointing out the fault and waiting for a new W-2 will price you fourth dimension, but hither'southward something that could make you lot experience better: The IRS might fine your employer if the fault involves a dollar corporeality or "a pregnant item" in your accost.
Your W-2 information is not a hush-hush
You won't become away with annihilation if yous just shove your Westward-2 in a drawer and decide not to put the data on your taxation return. Employers are legally required to transport copies of your Westward-2 to the Social Security Administration and IRS ("Copy A") and your state and local taxation authorities ("Copy i"). You'll probably get a terse letter of the alphabet and a few months' worth of headaches from the IRS — and the state, if your country has income taxes — later they compare the income you lot reported on your revenue enhancement render to the data your employer sent to the government.
Source: https://www.nerdwallet.com/article/taxes/what-is-w-2-form
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