- Dec 29, 2023
How To Read W2 Form?
A W-2 form, commonly known as a Wages and Tax Statement, showcases an employee’s earnings from the prior year and how much tax the employer has hidden. If you are looking for real pay stubs, then you should visit Stubbuilder.
Learning about a W-2 form can help you file your taxes accurately every year. In this blog, we shall help you understand the W-2 form, list why it is essential, and provide you with steps on reading a W-2.
What is a W-2 Form?
A W-2 form is a wage and tax statement used to file an individual employee’s taxes. A W-2 lists an employee’s earnings information, including how much tax an employer withholds from an employee’s pay.
A withholding tax is an amount that the employer withholds from an employee’s earnings. You can use the W-2 form to file your federal, state, and local taxes every year.
An employer reports an individual with multiple jobs and any income of at least $600 throughout the tax year. The IRS requires employers to report this information on the W-2 form and to provide the employees with a copy of the same.
Why is a W-2 Form Crucial?
A W-2 form is essential because it scans an employee’s earnings information. The W-2 determines if someone pays additional taxes or receives a tax refund.
Ultimately, a W-2 shows an employee’s earnings throughout the previous year. An employer then uses that amount to pay the federal government. The employees pay the remaining balance while filing their tax returns. If the employer has hidden too much tax, the IRS can issue a tax refund, but if they do not withhold enough, the employees pay the difference amount.
You can use this form to finish the other tax forms so you can file and submit your taxes on time. A W-2 form is vital because it offers an opportunity for you to cross-check if there are any errors in the reported salary. Once you have a copy of the W-2 form, you can go through it to make sure that all the information listed is correct.
When Should I Receive My W-2 Form?
You should receive your W-2 form by the first week of February. The IRS requires employers to furnish the W-2s to the government and employees by 31st Jan.
The IRS generally defines furnish as get it in the mail. Employers can send employees their W-2s electronically, but it is not required. That means you can get yours online.
Even if you quit your job months ago, your ex-employer can still wait until Jan 31st. Send a W-2 unless you ask for it earlier, which the employer has 30 days to provide you with it.
How To Read W-2 Form?
Below is a flashy overview of how to read W-2. So, let’s start:
Box 1: Shows how much you were paid in wages, bonuses, and other compensation.
Box 2: Shows how much federal income tax was withheld from your pay by your employer.
Box 3: Shows how much your pay in Box 1 was subject to Social Security Tax.
Box 4: Shows how much Social Security Tax was withheld from your earnings.
Box 5: Shows how much of your pay in Box 1 was subject to Medicare tax.
Box 6: Shows how much Medicare Tax was withheld from your pay.
Box 7: Shows how much of the tip income you reported to your employer was subject to Social Security Tax.
Box 8: Shows the number of other tips your employer allocated to you. This pay isn’t included in Box 1.
Box 10: Shows the amount of dependent care benefits your employer paid to you.
Box 11: Generally, this box shows how much money was distributed to you during the year from your employer’s deferred compensation plan.
Box 12: There are four areas in which the employer can provide more detail about some of the pay reported in Box 1.
Box 13: This box shows whether your earnings are subject to Social Security and Medicare taxes but are subject to federal income tax withholding and whether you participated in different types of retirement plans.
Box 16-19: Shows how much of your pay is subject to state income tax, how much state income tax was withheld from your pay, how much income was subject to local taxes, and how much local taxes were withheld from your pay.
Now you know how to read W-2, and without any hassle, you can read a W-2 form and ensure that everything is correct.