The IRS Form W-2 is one of the most important documents used when filing your federal tax return. What’s on your W-2 can be the difference between owing taxes and receiving a refund. Here’s what you need to know to prepare your return with confidence.
The IRS calls Form W-2 a wage and tax statement. This document summarizes your income for the tax year and tracks income, Social Security, and Medicare taxes withheld. Because the W-2 records the amount of tax you have paid, it is an important document when filling out your federal tax return.
In addition to reporting the amount your employer withheld in payroll taxes (sometimes called FICA taxes), your W-2 also provides tax reporting on other compensation, such as employer-provided health insurance, retirement and health savings account (HSA) contributions, dependent care benefits, and more.
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Your employer must send you and the IRS a Form W-2 for tax purposes by January 31. Employers with 10 or more W-2 forms are required to file electronically with the IRS. You may hear some confusing terms referring to Form W-2 Copies A, B, and C, but these only refer to copies of the same form.
Copy A is for your employer to submit to the IRS, Copy B is for you to submit with your tax return, and Copy C is the tax information for your records. May also include a copy of Form W-2 reflecting any state, city, or local income taxes withheld.
Employers are also responsible for filing a W-3 form with the Social Security Administration (SSA) for each of their W-2 employees to determine Social Security benefits.
Although your employer files the W-2 associated with your Social Security number with the IRS, you are also responsible for including a copy with your personal tax return.
Read more: How to determine your withholding taxes to avoid surprises
Anyone who earns wages from an employer should receive a W-2 form. Employers must submit this form for any employee who earns $600 or more during the tax year. You may receive multiple W-2s if you changed jobs during the year or had more than one job.
Self-employed individuals, such as freelancers and independent contractors, do not receive a W-2. These workers are not on the employer’s payroll and generally are not required to withhold income taxes. Instead, look for a 1099 form to get a summary of your income and calculate your taxes.
Staring at your W-2 form but not sure what you’re looking at? The information covering 20 different fields is enough to overwhelm the average taxpayer. You can find the following in each box of your current Form W-2 wage and tax report.
At the top of the W-2 form is the employee’s name, address, and Social Security number. This information is listed along with the employer’s address and employer ID number or state ID number, if applicable.
There is also a control number box, which refers to the number your employer may have assigned to your W-2 in their system.
Box 1 and Box 2
Column 1 shows your taxable income, including gross wages and other compensation. Box 2 shows your federal income tax withholding for the year.
Box 3 and Box 4
These boxes are all about Social Security, including how much of your income is subject to Social Security taxes and the amount of Social Security taxes withheld.
Box 5 and Box 6
These boxes on your W-2 show how much of your paycheck is subject to Medicare taxes and the amount of Medicare taxes you had withheld.
Boxes 7 and 8
These two boxes are for extra expenses you may earn, such as tips, that are subject to Social Security taxes in Box 7 and allocated tips in Box 8. The IRS defines allocated tips as “the amount your employer allocates to you, in addition to the tips you report.”
Box 9 and Box 10
If you don’t see anything in box 9, don’t worry. This is an area of tax credits that no longer exists. Box 10 reports the amount of dependent care benefits you receive from your employer.
Boxes 11 and 12
Box 11 has some confusing language about nonqualified plans, but this simply refers to the deferred compensation typically provided to executives. Box 12 shows other types of compensation, such as 401(k) or health savings account contributions.
Boxes 13 and 14
Box 13 has three smaller boxes that show whether you are a statutory employee, participate in an employer-sponsored retirement plan or receive sick pay from a third party. Box 14 is for all remaining expenses, such as state disability insurance, union dues, and health insurance premiums.
At the bottom of the W-2 form, there may be additional boxes that reflect state tax information, such as any state income tax or local income tax withholding. If your state or local government does not offer or require automatic tax withholding, these boxes may be left blank.
If you haven’t received your W-2 by the end of January, you can contact your employer to find out when you should receive it. By the end of February, if it is still missing, contact the IRS. They will request forms on your behalf and provide you with alternative forms that you can use to file your taxes at the same time.
Sometimes employers send incorrect W-2s, such as ones with inaccurate amounts or misspelled names. If this happens, point out the error to your employer and ask for the form to be corrected. This can take time and be cumbersome, but if large amounts are involved or errors are made, the IRS may fine your employer.
For your own peace of mind, it’s worth waiting for the corrected form. If your taxable income on your federal or state tax return does not match what is on your W-2 form, it could trigger an IRS audit. The IRS provides instructions for filling out the supplemental form in case you don’t receive your corrected W-2 by the tax filing deadline.
Please note that if your W-2 withholding exceeds your tax liability for the year, the IRS will refund you. But if you don’t want to wait until tax season to get your money back next time, work with your employer to correct and adjust your withholding.
You can check with your employer to find out when you can expect to receive your W-2. You can access it online.
If you have not received your W-2 form by the end of February and your employer has not responded, you can contact the IRS at 800-829-1040. They will follow up with your employer and send you a replacement form to fill out so you can complete your taxes.
2. What is the difference between W-2 tax form and W-4 tax form?
It’s easy to confuse forms W-2 and W-4, but the W-2 is the form your employer fills out to report your income and amounts withheld for federal and state tax purposes. The W-4 form you fill out tells your employer how much tax to withhold.
A W-4, also known by the IRS as an employee withholding certificate, tells the company or small business you work for how much tax you want withheld, depending on your marital status, how many children you have, and other information.
All employees with taxable wages or compensation in excess of $600 should receive a W-2. Some employees may even receive multiple W-2s if they work more than one job in a year.
The exception to this rule is self-employed taxpayers such as independent contractors, gig workers, or freelancers. Unless defined as statutory employees, these workers will receive a 1099 form instead of a W-2 form. Since they do not have federal income taxes withheld, these taxpayers can use a 1099 to calculate their taxable income and estimate any remaining tax liability.
Read more: How does self-employment tax work? Step-by-step guide
While your employer is responsible for filing W-2s (and W-3s) with the IRS and Social Security Administration, you also need to file a W-2 (and W-3) with your federal and state tax returns. The exception is if your income is less than $600, in which case the IRS will not require a W-2, but taxpayers are still encouraged to report the income.
Independent contractors and freelancers file Form 1099 instead of Form W-2, which details their taxable income and other compensation for the tax year.
