How to Read Your W2 Earnings Summary
A Form W-2 is more than just a slice of newspaper; it'south one of the most important records you demand at tax time. Hither's what a Due west-2 is, how to understand what's on it and how to go your Westward-2.
What is a Grade W-2?
IRS Form W-2, the "Wage and Taxation Statement," reports an employee's income from the prior year, how much revenue enhancement the employer withheld and other information. Employers send employees a Form West-2 in January (a copy too goes to the IRS). Employees use Form W-two to ready their tax returns.
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Your Class W-2 tells you lot how much you lot earned from your employer in the past yr and how much withholding revenue enhancement you've already paid on those earnings. For many people, the information on the W-2 determines whether they're getting a refund or writing a cheque at tax fourth dimension.
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Y'all should receive a Westward-two from every employer that paid you at least $600 during the year. Tip income may be on your W-2. Freelancers or contained contract workers go 1099 s from their clients, not W-2s.
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Don't confuse a W-2 with a W-iv — that'due south the form you use to tell your employer how much tax to withhold from your paycheck every pay period ( acquire how withholding taxes work ).
How practice I get my Course W-2?
If your Westward-2 for the current year doesn't testify upward in the mail by Valentine's Day, get-go inquire your employer for a re-create and make sure it's got the correct address. Your employer may also tell you how to get your W-2 online from the HR department or payroll processor. If that doesn't set things, call the IRS ( here's a list of useful IRS phone numbers ). Yous'll need to provide data almost when yous worked and an estimate of what you were paid.
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Call back that your tax return is still due by the tax-filing deadline , so if y'all don't have your West-2, you might need to estimate your earnings and withholdings to become information technology washed on time. ( Go here to learn more about getting an extension .) The IRS might delay processing your return — read: refund — while information technology tries to verify your data.
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If your W-2 finally shows up subsequently yous already filed your revenue enhancement return, you might need to go dorsum and amend your tax render .
Nerdy tip: If you're looking for a copy of an old West-2 that yous attached to a prior tax return and you can't get a copy from the employer that originally issued it, you lot can request an IRS tax transcript online or use IRS Form 4506 to request a copy of your tax return.
When should I receive my Grade Westward-2?
The IRS requires employers to furnish W-2s to the government and employees by Jan. 31 or confront penalties. The IRS generally defines furnish every bit "get it in the mail," which ways yous should have yours in hand by the first week of February. Employers can also send employees their W-2s electronically, but it's not required. That ways you may be able to get yours online.
Even if y'all quit your job months agone, your ex-employer can even so wait until Jan. 31 to ship you a W-2 — unless you enquire for it earlier, in which instance the employer has 30 days to provide it.
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How a Grade Westward-2 works
You use the W-2 to file your tax return. Form Due west-2 shows more than just what you were paid. It also details how much you contributed to your retirement plan during the year, how much your employer paid for your wellness insurance, or fifty-fifty what you received in dependent intendance benefits. All of that data affects your tax picture show — your retirement contributions might not be taxable , for instance.
Box 1: Details how much you were paid in wages, tips and other compensation.
Box two: Shows how much federal income tax was withheld from your pay.
Box 3: Shows much of your pay in Box i was subject to Social Security revenue enhancement.
Box iv: Shows how much Social Security tax was withheld from your pay.
Box 5: Shows much of your pay in Box 1 was subject to Medicare taxation.
Box six: Shows how much Medicare tax was withheld from your pay.
Box 7: Shows how much of the tip income you reported to your employer (those tips are included in Box one ) was subject to Social Security revenue enhancement.
Box 10: Shows the amount of dependent care benefits your employer paid to you or incurred on your behalf. Note: By and large, anything over $five,000 ($2,500 if you're married past filing separately) is detailed in B ox 1 as well. For the 2021 tax year (taxes due in April 2022), the American Rescue Plan Deed permits employers to increment this amount to $10,500 ($5,200 for married filing separately).
Box 11: By and large, this box shows how much money was distributed to you during the year from your employer'south deferred compensation plan.
Box 12: Here, at that place are four areas in which the employer can provide more than detail near some or all of the pay reported in Box ane. For example, if yous've contributed to your company's 401(k) program, the amount of your contributions might testify upwards in Box 12 with the lawmaking letter "D." There are many codes, which you lot can encounter in the IRS's W-ii instructions .
Box thirteen: This box indicates whether your earnings are subject to Social Security and Medicare taxes but aren't subject to federal income tax withholding, whether you participated in certain types of retirement plans, or whether you got certain kinds of ill pay.
Boxes sixteen-19: Show how much of your pay is discipline to state income tax, how much country income tax was withheld from your pay, how much income was subject to local taxes, and how much local tax was withheld from your pay.
What to do if your W-two is wrong
If your employer leaves out a decimal bespeak, gets your proper noun or a dollar amount wrong, or checks the wrong box — it happens — betoken out the fault and ask for a corrected Westward-2. Pointing out the mistake and waiting for a new Westward-2 will cost yous time, but here's something that could make y'all experience better: The IRS might fine your employer if the error involves a dollar corporeality or "a significant particular" in your address.
Your W-2 information is not a secret
You lot won't go abroad with anything if y'all merely shove your Westward-two in a drawer and decide not to put the information on your tax return. Employers are legally required to send copies of your W-two to the Social Security Assistants and IRS ("Copy A") and your land and local revenue enhancement regime ("Copy ane"). Yous'll probably go a terse letter and a few months' worth of headaches from the IRS — and the country, if your state has income taxes — after they compare the income you reported on your tax return to the data your employer sent to the government.
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Source: https://www.nerdwallet.com/article/taxes/what-is-w-2-form
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