The W-2 form is a document issued by the Internal Revenue Service (IRS) that reports the taxable income you earned from your employer. The form also includes the taxes withheld from your paycheck, along with Social Security and Medicare contributions made on your behalf by you and your employer.
How does the W-2 form work?
The W-2 form is used only for earnings from which taxes have been withheld. Your employer reports these earnings to you and the IRS on a series of detailed forms each year. Additionally, the W-2 form informs you of the income you must claim on your tax returns and the payments you have already made through withholdings. The W-2 form also informs the IRS of the amount of income you should claim and confirms the amount you paid in taxes.
Who uses the W-2 form?
You are required to report all wages you received from your jobs on your annual tax returns. You should receive a W-2 form from your employer, whether you are a part-time or full-time worker, if you earned $600 or more in income from that company during the tax year.
Where can you obtain a W-2 form?
Employers must prepare a W-2 form for each eligible employee. Employers generally must send you a W-2 form by mail or deliver it to you in person by January 31 of the previous tax year, for example, January 31, 2023, for earnings in 2022.
What to do if you do not receive a W-2 form?
Ask your employer when the W-2 forms were sent to employees if you do not receive your form by mid-February. You can also request another printed copy of your W-2 form. Some employers may charge a small fee to provide you with an additional copy.
You can contact the IRS for assistance at 800-829-1040 if you believe your employer may not have sent W-2 forms or if the employer refuses to provide you with a W-2 form. Make sure you have some information ready, including:
- The name of the employer and their full address
- The employer’s phone number
- The employer’s tax identification number (EIN)
You should also be able to provide at least an estimate of the wages you earned, the federal income tax withheld by your employer, and the dates of your employment if you no longer work there. This information should be available on your pay stubs.
Note: The IRS may ask you to submit Form 4852 with your tax return if you are unable to obtain a W-2 form from your employer. This form works as a substitute for the W-2 form.
You can also ask your employer to correct any incorrect information on your W-2 form. Your Social Security number may be incorrect, your name may be misspelled, or the wages and withholding amounts may be inaccurate.
How to read your W-2 form?
The numbered boxes on the W-2 form provide information that identifies you: your Social Security number, your employer’s tax ID or EIN, everyone’s addresses, and their full legal names. Box D is a control number that identifies your unique W-2 document in the employer’s records.
The numbered boxes on the W-2 form record your financial information:
- Box 1 reports the total taxable wages, tips reported, salary, bonuses, and other taxable compensation and fringe benefits. Box 1 does not include any pre-tax benefits like contributions to a 401(k) plan, a 403(b) plan, or health insurance.
- Box
- Box 2 reports the amount withheld by your employer from your wages for federal income taxes.
- Box 3 reports the total amount of your wages subject to Social Security tax. This tax is estimated on wages up to $147,000 for the year 2022. This “wage base” is adjusted annually to account for inflation.
- Box 4 reports the total amount of Social Security tax withheld from your wages. The amount shown in Box 4 should not exceed $9,114 for the year 2022 (6.2% on wage income up to the Social Security wage base of $147,000).
- Box 5 reports the amount of your wages subject to Medicare tax. There is no wage base limit for Medicare.
- Box 6 reports the amount withheld from your wages for Medicare tax. This is a flat rate of 1.45% on your total Medicare wages. Box 6 should be greater than Box 5 multiplied by 1.45% because the IRS will impose an additional Medicare tax of 0.9% over 1.45% on dollars earned over $200,000.
- Box 7 reports any tip income that you reported to your employer. It will be blank if you did not report any tips. The total of Boxes 7 and 3 should not exceed the Social Security wage base.
- Box 8 reports any tip income that was allocated to you by your employer. This amount should not be included in the wages reported in Boxes 1, 3, 5, and 7.
- Box 10 reports any amounts you were reimbursed for dependent care expenses through a Flexible Spending Account (FSA), or the cash value of dependent care services provided to you by your employer. Reimbursements and services under $5,000 are not taxable in 2022. Any amount over $5,000 must be included in the amounts in Boxes 1, 3, and 5.
- Box 11 reports any amounts distributed to you from your employer’s non-qualified deferred compensation plan or a government Section 457 retirement plan. The amount in Box 11 is included as taxable wages in Box 1.
- Box 12 is for deferred compensation and other compensation. Your employer can enter multiple types of compensation and benefits in Box 12, so the IRS has simplified this as much as possible by allowing the employer to enter a single letter or two-letter code followed by the cash amount of your compensation. Ask your employer what the code means.
- Box 13 includes three optional boxes indicating whether you are a statutory employee, whether you participated in an employer retirement plan, and whether you received sick pay from a third party. Your employer will check all that apply to you. Sick pay is not included in Box 1 wages, although it is generally subject to Social Security and Medicare taxes. Your employer may provide additional tax information in Box 14. Any amounts in this box should include a brief description of what they relate to. Union dues, uniform payments, or non-taxable income are reported here.
- Box 15 reports your employer’s state and state tax identification number.
- Box 16 reports the total taxable wages you earned in that state.
Source: https://www.thebalancemoney.com/understanding-form-w-2-wage-and-tax-statement-3193059
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