Term: W-2 Form
Type: IRS tax form (Wage and Tax Statement)
Used by: Employers and employees in the U.S.
Filed with: Internal Revenue Service (IRS)
Definition
The W-2 Form is an IRS document that employers in the United States must issue each year to report an employee’s wages and the taxes withheld from those wages.
Employees use the W-2 when preparing their personal income tax returns. It includes important information like total earnings, Social Security and Medicare contributions, and federal and state taxes withheld.
Employers must send the W-2 to both the IRS and the employee by January 31 each year.
Key Features
- Lists wages, tips, and other compensation
- Reports federal, state, and local tax withholdings
- Includes Social Security and Medicare contributions
- Issued annually by employers
- Required for all employees, but not for independent contractors
Common Use Cases
- Filing personal income taxes (Form 1040)
- Proving income for loans or housing applications
- Verifying employment and wage history
- Payroll and record-keeping compliance for businesses
Benefits or Advantages
- Ensures accurate tax reporting and withholding
- Helps employees track yearly income
- Provides documentation for deductions and credits
- Mandatory for tax compliance and IRS filings
Examples or Notable Applications
– A full-time employee receives a W-2 in January to file taxes
– Multiple W-2s may be issued if someone had multiple employers in a year
– Form 1099-NEC is used instead for independent contractors
External Links
This post is for informational purposes only and does not constitute tax or legal advice.