W-2 Form: What Is It and Who Needs to Fill It?

If you’re employed in the United States, chances are you’ll receive a W-2 form every year. Formally known as the Wage and Tax Statement, it is one of the most important tax documents for employees. It lists your yearly income and the amount of tax that is deducted from your paycheck, so it is an important document for completing your federal and state income tax returns. 

You’ll find out what is W-2 form and who receives it, what’s on the form, and how to read it in this blog. So, let’s get started!

What is a W-2 Form?

The W-2 form is an IRS tax form that is sent to employees by their employers at the end of every tax year. It tells you the amount of wages that you received in the past as well as the taxes that were deducted from your paycheck. 

These details are also sent to the Internal Revenue Service and, often, state tax offices. This enables tax authorities to check the income and tax withheld declared on your tax return. 

If you were an employee and received wages that were taxable income for the year, your employer must give you the form by the deadline for filing at the end of the year. 

Who is Given a W-2 Form? 

Generally, this form is issued to an employee, not an independent contractor. 

You need to fill out the W-2 form if you: 

• Have full-time work
• Work part-time
• Held a seasonal job
• Worked on several jobs throughout the year
• Earn wages in any form from payroll

If you worked for more than one employer during the year, you’ll receive a separate W-2 from each employer.

Many self-employed people, freelancers, and independent contractors typically get a Form 1099 and not the W-2. 

Who is Responsible for W-2 Forms?

Your employer will prepare and send you your form every year. 

Employers must: 

• Report the total amount of money you earn each year 
• Ensure withholding of federal and state taxes
• File Social Security and Medicare taxes
• Make copies and give one to you and the IRS
• Make sure that all deadlines for filing the annual report are met

While most employers today send forms digitally via employee portals, there are still large numbers that are mailed out on paper. 

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What Information is Included on a W-2 Form?

This form contains many key pieces of information about an employee’s occupation, salary, taxes, and additional benefits that need to be filled out accurately. Let’s go through each of them here: 

1. Employee Information 

This section includes: 

• Your full name 
• Home address 
• Social Security Number 

This information is used to match tax returns, and accuracy is important. 

2. Employer Information 

You can see the following in your employer’s section: 

• Business name 
• Address 
• Employer Identification Number 

Your employer identifies you with the EIN for tax purposes. 

3. Total Wages 

Your taxable wages are one of the most significant numbers on the W2. This includes: 

• Salary
• Hourly wages
• Bonuses
• Overtime pay 
• Certain taxable benefits 

This may be different from your gross salary due to pre-tax deductions such as health and retirement insurance. 

4. Federal Income Tax Withheld 

This box displays the total amount of federal income tax that was deducted from your paycheck during the year. 

This amount will be deducted from your total tax liability when filing your tax return. 

5. Social Security Wages and Tax 

It reports: 

• Social Security wages
• Withheld amounts from Social Security tax. 

The amounts are used to figure out your future Social Security benefits. 

6. Medicare Wages and Tax 

The form also contains the following: 

• Medicare wages 
• Medicare tax withheld 

Medicare wages can include earnings over the Social Security wage base. 

7. Local Tax and Your State Information 

It may also contain: 

• State wages 
• Withheld state income taxes 
• Local wages 
• Local tax withheld 

The amounts are filed with the state and local tax returns. 

Why are W-2 Forms Important?

It is one of the most important tax documents you’ll receive as an employee. It shows your total income and taxes paid for the year and is crucial for filing your taxes correctly and keeping proper financial records. 

• File Your Tax Return: Wage and tax information on your federal and state tax returns is provided by the W-2. Details on this form are also usually needed for most tax preparation software. 
• Verify Tax Withholding: Displays the amount of federal, Social Security, Medicare, and state tax that has already been withheld from your paycheck. This will help you know if you’ll get a refund or have more taxes to pay. 
• Proof of Income: If you are applying for a loan, mortgage, renting a home, or receiving financial assistance from any government agency, any bank will require it as proof of income. 
• Save Tax Records: You may want to save your forms for future use, should you need them for tax auditing purposes or when applying for a loan, and when tracking your annual income. 

What If You Don’t Receive Your W-2 Form? 

If you did not receive the form on time, don’t be alarmed; there are a few steps you can take to get your hands on it. The quick response can help you save time for filing your tax return. 

• Check Your Employer/Payroll Office: Call your employer or payroll office to confirm if you have received your W-2 by mail or if it is online. 
• Check the Address: If you have recently moved, ensure that the employer has your current mailing address so you don’t face any delivery problems. 
• Look at Your Payroll Portal: A lot of employers give their employees electronic versions of their W-2s in employee self-service or via a payroll portal. 
• Contact IRS: If you still haven’t been able to receive it from your employer, the IRS can help you with filing your tax return. 

What If Your W-2 Form Is Incorrect? 

Any mistake on your W-2 can be a problem when filing your tax return, no matter how minor. When you receive the form, carefully read over it to spot and fix errors promptly. 

• Review Your Personal Information: Ensure that your name, address, and Social Security Number are accurate and free of mistakes, which can slow down the processing of your tax return. 
• Wage and Tax Amounts: Check the wage and tax amounts on your form to match those on your last paycheck stub to make sure they are correct. 
• Ask Your Employer or Correct the Form: If you notice any errors, inform your employer right away. They can provide a correct document in time. 
• Don’t File Too Soon: If there is important information that is not accurate, wait for the corrected form before your tax return. 

How to File Taxes Using W-2 Form?

Most of the information to prepare your income tax return is found on your W-2.  Having the form in front of you will help you with the filing process, whether you’re filing it yourself or with a tax professional. 

• Collect All Forms: If you had to work for more than one employer this year, then make sure to get all of the W-2s first before you begin filing your tax return. 
• Report the Wage and Withholding Taxes: Do not provide any inaccurate information when reporting the wage and withholding taxes, as this may cause reporting errors or delays. 
• Check Before Filing: Double-check all entries for accuracy with your W-2 and make sure you have not missed any forms. 
• Make a Copy for Your Records: Keep a copy of your W-2 with your tax records for future reference or verification. 

W-2 Form Errors You Should Avoid 

To help prevent a stressful tax filing experience, here are common filing mistakes you must avoid: 

• Filing your taxes before you have all your forms.
• Not writing accurate wages and earnings. 
• Don’t forget to take the withheld amount from a second job. 
• Typing misspelled words or SSNs. 
• Losing your W-2 before filing. 

Spend more time studying and fill out the W-2 form accurately to avoid delays in processing and help decrease the possibility of amended returns being filed. 

Final Words 

The W-2 is a crucial document that aids employees in accurately reporting their annual earnings and taxes. Reading it, checking the accuracy of its information, and using it for filing can streamline the process and help minimize errors. A thorough examination of the W-2 annually and retaining it for your records will help you in the future in case of need or during tax season. 

We have covered everything about the W-2 form in this blog. We hope you have better clarity on it now. 

Read Next: Profit and Loss Statement: Its Importance, How It Works, and Errors to Avoid

FAQs 

Sources 

• About Form W-2, Wage and Tax Statement – By IRS 
• Online W-2 Forms – By Syracuse University