Form W-2: Everything You Need to Know

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Filing taxes is complicated, and knowing what forms to use can be difficult. That’s why it helps to have a guide that explains the basics of Form W-2 and how it works. In this article, we’ll look at everything you need to know about this form, from what it is to when you should file it. Get ready to get your tax filing in order!

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Key Takeaways

  • Form W-2 is an important federal tax form issued by employers that details the employee’s income earned during the tax year and how much of it is subject to taxes withheld.
  • Your employer must provide three copies of Form W-2: Copy B for filing with your federal income tax returns, Copy 2 for state or local taxes and Copy C for your records. You may also receive the form electronically if you and your employer agree.
  • If you owe taxes on your W-2, you must file an amended return and pay the extra taxes by April 15. Otherwise, late fees and penalties may apply.

What is Form W-2 (Wage and Tax Statement)

Form W-2 (Wage and Tax Statement) is a federal tax form issued by employers that reports employee income earned during the tax year. It shows how much money was made and how much went to federal income tax withheld.

Employers must provide a W2 form to employees by January 31 each year and send copies of it to the Internal Revenue Service (IRS) and applicable state or local government agencies, such as Social Security Administration.

What is the W-2 deadline in 2022?

The deadline for employers to distribute W-2 forms to their employees for the 2021 tax year is January 31, 2022. This is the deadline for providing W-2 forms to both current and former employees, as well as to the Social Security Administration.

If an employer fails to provide a W-2 by the deadline, employees can contact the IRS, who will follow up with the employer to request the missing document. Employees should also contact their employer to request a corrected form if they notice any errors on their W-2.

It is important to note that the W-2 deadline can change from year to year, so it is always a good idea to check with the IRS or a qualified tax professional to ensure that you have the most up-to-date information.

How many copies should I prepare?

Your employer is required to prepare multiple copies of Form W-2. Specifically, four copies are typically generated:

  • Your employer submits copy A to the Social Security Administration.
  • Copy B is provided to you for your federal income tax filing.
  • Copy C is for your records. You should provide it to your state or local tax department if required.

In addition to receiving paper copies, you may also have the option to receive electronic copies of your W-2 forms. It is crucial to ensure that all the information on the W-2 form is accurate.

If you notice any errors, you should contact your employer immediately to request a corrected version. Filing a real tax return is crucial for avoiding penalties and ensuring that you receive the appropriate tax refund or owe the correct taxes.

How to read Form W2?

Reading your Form W-2 might initially seem overwhelming, but it’s pretty simple once you understand its various sections.

  • Box 1 shows your total taxable wages, tips, and other compensation.
  • Box 2 shows how much you took federal income taxes out of your pay.
  • Box 3 indicates how much your wages in Box 1 were subject to taxable income like Social Security taxes.
  • Box 4 shows how much you took Social Security tax from your pay.
  • Box 5 indicates how much of your earnings in Box 1 were subject to Medicare tax.
  • Box 6 shows the amount of Medicare taxes withheld.
  • Box 7 shows the tip income you reported to your employer (these tips are included in Box 1).
  • Box 8 lists other information that your employer allocated to you. These are separate from Box 1.
  • Box 10 indicates the number of dependent care benefits paid by or on behalf of your employer.
  • Box 11 generally lets you know how much money was distributed from your employer’s deferred compensation plan in the year.
  • Box 12 offers more information about some or all the earnings reported in Box 1, such as if you contributed to a 401(k) plan with code letter “D.” You can see all codes within IRS’ W-2 instructions booklet.
  • Box 13 will tell whether any earnings are exempt from federal income tax withholding and whether you participated in the retirement plan and received sick pay, which is used to determine whether they are subject to Medicare taxes.
  • Box 14 allows employers to report extra tax information that doesn’t fit in other sections. This could include state disability insurance taxes withheld and union dues.
  • Boxes 16 – 19 indicate the amount of state income tax withheld by the flat tax rate, the amount subject to local taxes, and more information related to local taxes withheld from pay.

What is the difference between a 1099 and a W-2?

Two tax forms are used in the US: W-2 and 1099. An employer provides a W-2 form to employees. It details their wages, tips, and taxes withheld from paychecks during the year.

The employer is responsible for filing a copy with the Social Security Administration and giving a copy to the employee.

Employers must pay payroll taxes, provide benefits such as health insurance, and withhold taxes from employee wages if they offer W-2 forms.

A 1099 form reports income earned through freelance or contract work. If you make $600 or more through this work, the payer must give you a 1099 form and file it with the IRS.

When you receive this form, you’re considered self-employed, meaning you must pay self-employment taxes on your earnings. Unlike with a W-2 form, no taxes are withheld from payments reported on a 1099 form.

Frequently Asked Questions (FAQs)

Can I file US taxes without a W-2?

If you do not have a W-2 form, filing your taxes in the US is still possible using Form 4852. This form is a substitute for the W-2 form and contains information about your wages and taxes withheld from your pay.

Using Form 4852, you can estimate the income and taxes withheld from your pay based on your last pay stub and any other relevant records you may have. This form allows you to file your tax return even if you do not have access to your W-2 form.

It is important to file your tax return on time, even if you do not have a W-2 form, to avoid potential penalties and fees. However, it is always best to obtain a W-2 form from your employer to ensure the accuracy of your tax return.

What happens if I don’t file a W-2?

Filing your W-2 form is essential for accurate tax reporting, and failure to do so may result in penalties and fees. Although you may still receive a tax refund even if you do not file your W-2 form, you may face the consequences if you owe taxes.

In such a case, you must file an amended tax return and pay the additional taxes owed by the April 15 deadline to avoid incurring late fees and penalties. Therefore, filing your W-2 on time is essential to prevent any potential issues with the IRS.

Is W-2 a full-time employee?

W-2 form from their employer at the end of the tax year. This does not necessarily mean that the employee works full-time, as part-time and full-time employees can receive W-2 forms. Once the employer files the W-2 form with the IRS, the employee will have a record of their income for the year, and the employer is responsible for paying payroll taxes and providing benefits such as insurance.

What is the penalty for not sending a W-2 on time?

If you earn more than $600 in a year from a job, you must receive a Form W-2 from your employer. Failure by employers to file W-2 forms on time can result in penalties from the IRS. For instance, if the employer is up to 30 days late, they may be penalized up to $30 per W-2, with a maximum penalty of $250,000. However, if the delay exceeds 30 days, the fine could be as high as $100 per W-2, with a maximum of $1.5 million.

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