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What is a W-2 Form?
Tricia Christensen
Tricia Christensen
A W-2 form is a tax form created by the Internal Revenue Service (IRS) in the US. It is also called the Wage and Tax Statement and is used to report information about money earned and taxes deducted to the Social Security Administration (SSA), the IRS, and to employees. Employers create these forms for their employees and send copies to the SSA. The SSA then sends information from the W-2 to the IRS.
Employees use a W-2 form, or several if they worked for more than one company, to help file their tax returns. They usually receive several copies so that they can keep one for their records, and file the other copies with federal, state, and local tax agencies. Of most importance on these forms is wages earned and amount of payment in taxes.
All workers tend to receive their W-2s at approximately the same time each year. The government requires employers to send them to employees by the 2 February, and they must then file them with the SSA by 2 March.
Anyone who has worked for an employer during the year and been paid for their work in between 1 January and 31 December should receive a W-2, even if little money was taken out in taxes. People who work as independent contractors don’t receive this form; instead, they receive a 1099. Nonresident aliens who work for US employers typically get a 1042-S instead of a W-2.
The form can have multiple components separated into boxes. It includes the employee’s name, the company’s name, and the employee’s Social Security number. The standard form has 20 numbered boxes, which include the following information:
- Wages, tips, and compensation
- Federal income tax withheld
- Social Security wages
- Social Security tax withheld
- Medicare wages and tips
- Medicare tax withheld
- Social Security tips
- Allocated tips
- Advanced earned income credit (EIC) payment
- Dependent care benefits
Other categories include amounts paid to state and local income tax.
Not all employees will have each box of the form filled out; it depends upon the employee’s status, income, and deductions that may be nontaxable. Other variables include whether a state or local area assesses taxes.
If people work for more than one employer during the year, they can expect a W-2 from each. When one is not received, employees or former employees should contact that employer. If people are filing taxes with more than one W-2 form, all amounts must be combined to accurately report wages and withheld taxes. Income tax forms typically reference specific box numbers so people know where to look on their W-2s to find needed information for income tax forms.
Tricia Christensen
Tricia has a Literature degree from Sonoma State University and has been a frequent WiseGEEK contributor for many years. She is especially passionate about reading and writing, although her other interests include medicine, art, film, history, politics, ethics, and religion. Tricia lives in Northern California and is currently working on her first novel.
Learn more...
Tricia Christensen
Tricia has a Literature degree from Sonoma State University and has been a frequent WiseGEEK contributor for many years. She is especially passionate about reading and writing, although her other interests include medicine, art, film, history, politics, ethics, and religion. Tricia lives in Northern California and is currently working on her first novel.
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AS FEATURED ON:
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![A W-2 wage and tax statement.]()
By: Mariusz BlachA W-2 wage and tax statement. -
![Wages and taxes reported on a W-2 Form are used to complete an individual's 1040 Form.]()
By: cphotoWages and taxes reported on a W-2 Form are used to complete an individual's 1040 Form. -
![Employees are required to fill out a W-2 form to report income earned for tax reasons.]()
By: FotolEdharEmployees are required to fill out a W-2 form to report income earned for tax reasons. -
![Independent contractors receive a 1099 form instead of a W-2 to report wages.]()
By: michaeljungIndependent contractors receive a 1099 form instead of a W-2 to report wages. -
![A social security number is necessary to fill out a W-2 form.]()
By: JohnKwanA social security number is necessary to fill out a W-2 form.
Discussion Comments
Well, I'm glad that it's normal for some of the boxes on a W-2 to be blank. It seemed that the majority of the boxes on mine were empty.
I think this is because I haven't taken advantage of the 401(k) or the retirement plan yet. My coworkers who are participating in these had more of their boxes filled with numbers than I did.
@healthy4life – It's much simpler to do your taxes with a W-2 form than with a 1099. This is because when an employer gives you a W-2, they have already taken out taxes for you all year from each paycheck, and all the details are listed on the W-2.
When you get a 1099, the only thing listed on it is how much the company paid you for your work. This is because they didn't take out any taxes at all, so you have to be sure to save a certain percentage of each paycheck and set it aside for tax purposes only, because you will likely owe a good bit.
You will have to pay Social Security and Medicare in addition to federal and state taxes. The percentage that worked for me was 26%, but it will vary according to how much you make.
I'm used to filing a W-2 form, but I will be getting a 1099 next year. Is it harder or easier to do your taxes with a 1099 than with a W-2?
My husband gets paid $7,000 a month and they take $2,500 every time. i do not work and we have a toddler daughter. why are they taking so much, and we only received $1,000 back from federal.
Sunshine31-Filling a W2 form can be confusing because of the allowable deductions. For example, married women can claim her children as dependents and lower her withholding amount.
Sometimes if the withholding amount is too low you will have to pay taxes in April when you file your W2 form. If you list zero dependents you will be paying the highest possible taxes and will receive a tax refund for the excess.
Greenweaver-Most employers have to send the W 2 form deadline by the end of January. This form outlines the total wages earned as well as the Medicare and Social Security taxes paid.
A 1099 functions the same way but they do not have any withholding information because the status of the worker is an independent contractor.
Since he is not an employee he is responsible for paying the taxes due because none of the earnings have been taxed yet. Most independent contractors reserve about 20% of their earnings in order to satisfy the tax bill.
A W 2 form and a 1099 are similar.
Both are tax return forms that are filled with the Internal Revenue Service. However, a new hire employee of a company usually initially fills out an internal revenue service W 2 form.
The employee has to determine the number of exemptions which will affect the withholding amounts.
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