W-2 Tax Form

January marks the time of year when employees around the nation wait in anticipation for their W-2s—quite often it’s the final document that’s needed to start filing a tax return. What is Form W-2 used for, and why do you need it to file taxes? Here’s a brief overview.

What is a W-2? (W-2 Tax Form Defined)

IRS Form W-2 is called the “Wage and Tax Statement,” and it’s one of the most common tax forms. If you received income from an employer, then your employer will send you a W-2 tax form when the tax year ends. Form W-2 is sent by employers that pay an individual at least $600 in non-cash income, if income taxes and FICA taxes (Social Security and Medicare) were withheld. Taxpayers report this income and the associated withholdings on their income tax returns, such as Form 1040. Form W-2 will be used to report withheld taxes if the individual meets the exemption criteria.

W-2 Instructions for the 2019 Tax Year

If you’re preparing to file your taxes for the 2019 tax year, then you’ll need to use the information provided on your W-2 form for 2019 to report your income and tax withholdings on your income tax return.

How to Read a W-2 Tax Form

Every W-2 has the same fields, no matter who the employer is. Each form is divided into state and federal sections, since you may have to pay taxes on both. Here’s a summary of each section.

Boxes A through F

The lettered boxes on a W-2 include:

  • Your name and address
  • Name and address of your employer
  • Your social security number
  • Your employer’s EIN and state ID numbers

Boxes 1 and 2

Box 1 shows your taxable income (wages, salary, tips, and bonuses). Box 2 shows the amount of taxes withheld from your pay.

Boxes 3 and 4

Box 3 shows how much of your earnings were subject to Social Security tax, while Box 4 tells you how much money was withheld for that tax.

Boxes 5 and 6

Box 5 shows how much of your earnings are subject to Medicare taxes, while Box 6 shows how much was withheld.

Boxes 7 and 8

Box 7 shows how much earnings you reported in tips, while Box 8 shows how much your employer reported in tips paid to you.

Box 9

This box previously reflected a tax perk that is no longer used. Now it’s left blank.

Box 10

Box 10 reports how much you received from your employer in dependent care benefits.

Box 11

Box 11 shows how much-deferred compensation you received from your employer.

Box 12

Box 12 shows a variety of deferred compensation types (for instance, contributions to a 401(k) plan).

Box 13

Box 13 reports pay that is not subject to federal taxes. This might include payments from an employer-sponsored retirement plan or an insurance policy.

Box 14

Box 14 allows your employer to report any additional tax information that doesn’t fit into the other boxes. This might include withheld taxes for disability insurance or union dues.

Boxes 15 through 20

The final 6 boxes all pertain to local taxes.

Filing Your Tax Return

When you’ve obtained the W-2 from each of your employers, you may be ready to file your tax return. Remember, the IRS will also receive a copy of your W-2, so they’ll know if you failed to file your taxes or if you’re falsifying the information provided on your return. Additionally, you must attach your W-2 with your tax return when you file. It’s important that you make sure your W-2 is accurate and that you’re reporting your income accurately.

Correcting W-2 Tax Form Mistakes

It’s possible that your employer makes an error on your W-2—they might leave out a decimal point, get a dollar amount wrong, or misspell your name. If you notice a mistake on your W-2, immediately inform your employer and request a corrected W-2. This may cost you a little time, but you won’t be penalized by the IRS. If anything, your employer could get fined for making a significant mistake.

What if I Didn’t Receive a W-2 Tax Form?

Employers must send W-2 forms to their employees in January. It’s possible that your employer waits until the last day in January to send you one, so it might not come by the end of the month. But if you haven’t received a W-2 by Valentine’s Day, then there might be a problem.

Ask your employer whether or not they have the right address on file for you. If they’ve got the correct address, then contact the IRS—you may need to provide some personal information and employment information to confirm your identity.

You must file your tax return by the April deadline, even if your W-2 comes late. If you don’t think you can complete your tax return in time, file an extension with the IRS.

What’s the Difference Between a W-2 and W-4?

Form W-2 and Form W-4 are often mistaken for one another. As you now know, Form W-2 reports your wages and withheld taxes. Form W-4, on the other hand, enables you to choose how much you want withheld from each paycheck. This is a complicated subject, but it’s worth reading up on because your tax withholdings can significantly affect each paycheck you receive throughout the year.

If you need help with Form W-4, or if you need help filing your taxes, don’t hesitate to contact a qualified tax professional today.