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Tax season can be a headache, but it doesn’t have to be. One effective way to make filing your taxes easier is by better understanding one of the necessary tax forms: Form W-2.
You should receive your W-2 by mid-February at the latest. Employers must send out W-2s to their workers by January 31st each year (or a few days later if the end of the month falls on a weekend). If you haven’t received it by then, contact your employer. You cannot file your taxes until you’ve received your W-2, which is essential to the process.
Form W-2 helps the IRS determine how much income employees should be claiming and confirms what they have already paid in taxes and need to pay in taxes (if any). Form W-2 is a necessary component for tax returns and tax filing.
Form W-2, or the Wage and Tax Statement, is the annual statement provided by your employer that reports your taxable income to you and the IRS. The form shows you and your employer’s payments for Medicare and Social Security and taxes withheld from your pay.
All of the taxes withheld from your pay are on Form W-2. Information on Form W-2 goes to state and federal taxing authorities. It helps determine how much you should be paying in taxes for the given year.
Reading a W-2 can be daunting if you do not understand the listed information. Form W-2 has multiple boxes explaining different aspects of your earnings and withholdings. Even if you’re not trying to file your taxes, you should still be able to read your W-2.
Below is a short explanation of every box on Copy B of the W-2, which is the one you will file with your tax return:
Boxes A – F: Lists the following:
Box 12: All of the codes your employer needs to report to the IRS:
Box 13: These options are not subject to federal income tax withholding. The checkboxes include:
Box 14: A miscellaneous field. This field could include:
Boxes 15 to 20: These boxes contain local and state income tax information from your employer. The boxes include:
You will also need to attach Copy 1 to any other tax returns you’re required to submit (including state, city, or local).
Once you receive Form W-2, you will be able to file for your tax return using Form 1040, your W-2, and any other financial and tax documents.