The annual "Wage and Tax Statement," or Form W-2, is how you and the Internal Revenue Service are both informed of the taxable income you received from an employer (IRS). Taxes deducted from your pay and payments for Social Security and Medicare made on your behalf by both you and your employer are also listed on the form.
Form W-2 Definition and Sample
Each year, a number of informational forms are used to report earnings to the recipient and the IRS. Only employee earnings from which taxes have been withheld are reported on the W-2. Employees are made aware of the income they must report on their tax returns and the withholding payments they have already made. Form W-2 provides the IRS with guidance on the amount of income the employee should be claiming and verifies any tax payments made.Who Uses a Form W-2?
Employees must report all wages received from employment on their yearly tax returns. Regardless of whether you work full- or part-time, if you received $600 or more in income from your employer during the tax year, you should receive a Form W-2 from them. Copies B, C, and 2 of your W-2, which show what you were paid and what was withheld, should be provided to you: Your employer sends Copy A to the Social Security Administration. If you're mailing your federal income tax return, include Copy B with it. Keep your return and other tax documents together for at least four years if you file it electronically. Copy C should also be kept with your tax records for a minimum of four years. Officially, this is your copy. If you're mailing your state tax return, include Copy 2 with it. If not, store it alongside your tax records for at least four years, just as you did with Copy B.Where to Find the W-2
Each eligible employee must have a Form W-2 prepared by the employer. They must deliver copies to the Social Security Administration and the Internal Revenue Service. Your Form W-2 must be delivered to you by your employer no later than January 31 for the prior tax year, for instance, January 31, 2023, for 2022 earnings. For earnings from 2021 it was due on January 31, 2022.What to Do If Form W-2 Is Not Received
If you haven't received your Form W-2 by the middle of February, ask your employer when it was sent to the employees. Additionally, you can request a second printed copy of your W-2. Some employers might charge a small fee if you need an extra copy. If you believe your employer may not have sent out W-2s or if your employer is refusing to provide you with one, you may want to call the IRS at 800-829-1040 for assistance. Make certain that you have access to certain information, such as:- Name and full address of your employer
- Your company's phone number
- If you are aware of your employer's EIN, enter it here.
Understanding Your W-2 Form
Boxes A through F contain the following information: your Social Security number, your employer's tax ID number or EIN, each person's full legal name and address. Your specific Form W-2 document is identified in your employer's records by a control number found in Box D. Your financial details are listed in the numbered boxes on the Form W-2:- Your total taxable earnings are shown in Box 1. The total also includes any bonuses, other taxable compensation, and tips you reported to your employer. However, Box 1 does not include pretax benefits like savings contributions to a 401(k) plan, a 403(b) plan, or health insurance. Taxable fringe benefits like group term life insurance are included here. Line 1 of the 2021 Form 1040 contains a report of the figure that appears in Box 1.
- The amount that your employer deducted from your paychecks as federal income taxes is shown in Box 2. Line 25a of Form 1040 contains a report of this number.
- Your total take-home pay that is subject to Social Security tax is shown in Box 3. As of the 2021 tax year, this tax is imposed on salaries up to $142,800; in the following year, it rises to $147,000. Every year, this "wage base" is raised or lowered to account for inflation. If Box 3 displays a sum greater than the wage base, speak with your employer. Box 3 shouldn't contain tips that you've reported to your employer. These are detailed in Box 7.
- The total amount of Social Security taxes deducted from your paychecks are shown in Box 4. Since the Social Security tax is a flat tax rate of 6.2 percent on your wage income up to the $142,800 wage base, the amount in Box 4 should not exceed $8,853.60 for 2021.
- The number of your wages subject to the Medicare tax is shown in Box 5. The Medicare wage base has no upper limit.
- The amount of tax reduced from your paycheck for the Medicare tax is shown in Box 6. As of the 2021 and 2022 tax years, this tax is a flat rate of 1.45 percent of your total Medicare earnings. If you have a high income, you might discover that the amount in Box 6 is higher than Box 5 times 1.45%. The Additional Medicare Tax adds an additional 0.9 percent for those with high incomes.
- Your reported tip income is displayed in Box 7 to your employer. If you fail to submit any tips, it will be blank. If you do not receive any pretax benefits, the sum of Box 7 and Box 3 should equal the amount in Box 1; if you do, it may equal the amount in Box 5. Boxes 7 and 3 taken together shouldn't add up to more than the Social Security wage base. Box 1 already has the sum from Box 7 in it.
- Any tip money that was given to you by your employer is reported in Box 8. The wages that are reported in Boxes 1, 3, 5, or 7 do not include this sum. Instead, on Line 1 of your Form 1040, you must increase your taxable wages by the number of allocated tips. Using IRS Form 4137, you must determine your Social Security and Medicare taxes, including this tip income.
- Box 10 lists any money you might have received as reimbursement for child care costs through a flexible spending account (FSA) or the dollar amount of child care services your employer has paid for you. Under $5,000 in services or reimbursements, there is no tax due. In Boxes 1, 3, and 5, you must declare taxable wages for any sum over $5,000. Benefits for dependent care are reported on Form 2441.
- Box 11 lists any payments you received from a non-government Section 457 pension plan or your employer's non-qualified deferred compensation plan. The sum in Box 11 is already accounted for as taxable income in Box 1 as wages.
- Deferred compensation and other compensation are covered by Box 12. Box 12 deals with deferred pay and other forms of compensation. The IRS has made this as easy as possible by allowing your employer to enter a single letter or double letter code followed by the dollar amount of your compensation because there are numerous types of compensation and benefits that can be reported in Box 12. Find out the meaning of the code by asking your employer.
- Three checkboxes are present in box 13. If you are a statutory employee, the first will be crossed out. Accordingly, you must include the wages from this W-2 along with any other W-2s you obtain that bear the designation "statutory employee" on Schedule C of Form 1040. You shouldn't see a zero in Box 2 or any other information because your wages are not subject to income tax withholding. Boxes 3 through 6 must be filled out, though, since Social Security and Medicare taxes must be paid on earnings. These boxes will also be checked if you participated in the retirement program offered by your employer during the tax year and if you were granted third-party sick pay under the third-party insurance plan offered by your employer. Your Box 1 wages do not include sick pay, even though it is typically subject to Social Security and Medicare taxes.
- Box 14 could contain additional tax data that your employer reports. A brief justification must accompany any sums reported in this box. Listed here are the places where you can report union dues, employer-sponsored educational assistance, and after-tax retirement plan contributions.
- Your employer's state and state tax identification numbers are listed in Box 15.
- The total taxable wages you made in that state are shown in Box 16. Depending on the number of states you worked for the same employer in, this data may span multiple lines.
- The total amount of state income taxes reduced from your paychecks for the wages listed in Box 16 is shown in Box 17. These taxes may be deducted from federal income tax payments on Schedule A of the IRS Form 1040 if you decide to itemise your deductions for federal expenses.
- Wages subject to local, municipal, or other state income taxes are reported in Box 18.
- The total amount of taxes deducted from your paychecks for local, city, or other state income taxes is shown in Box 19. If you itemise your federal deductions on Schedule A, you may also be able to deduct some of this amount as state and local income tax deductions.
- The local, city or other state tax that is being paid is briefly described in Box 20. A specific city may be mentioned in the description, or it may mention state tax-like payments for state disability insurance (SDI).
File Your Form: How to Do It W-2
Fill out each box on the relevant line of your tax return with the appropriate amounts. If you and your partner are filing a joint tax return, and both of you have W-2s, add the boxes together.Main Points
- The IRS and the employee are both informed on Form W-2 of the earnings from employment and taxes deducted from those earnings.
- Employees use these specifics to complete their yearly tax returns.
- In general, employers have until January 31 to send W-2 forms to employees for the prior tax year.
- If an employer won't or can't provide you with a Form W-2 by the middle of February of the new year, you can call the IRS at 800-829-1040.
