What is a W2

As an employee, you will have to report all the money you make to the Internal Revenue Service (IRS). This is done in the form of a piece of paper your employer will give you called a W-2.

The reason why it is called a W-2 is because that is the IRS form number they assigned it when it was created many years ago.

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What Is A W2 Form?

The W2 form is an Internal Revenue Service (IRS) form that employers give to their employees once a year.

The information on the form holds all the employement information from the business to the employee showing:

Wages
Federal Taxes withheld
Medicare contributions
Social Security payments
State Taxes withheld
and much more

What is a W2 used for?

Employers are required by the law to issue these documents. However, this does not include self-employed workers or those on contract. These two file their taxes with different Forms.

Companies must also report the Federal Insurance Contributions Act, also known as (FICA), taxes for their employees all the year using the W2 forms.

By the end of January, the employers must file forms W2 and W3 for the previous year for every employee that has the Social Security Administration (SSA).

The employer should send the employee this form either on January 31st of every year or before then. By doing this, the employee gets enough time to file their income tax before the deadline, i.e. April 15th.

If you receive the W2 form on January 2019, it indicates your income for 2018.

Information found on W2

All the W2 forms look alike regardless of the employer. Employees must file taxes on both the state and federal levels. Therefore, the Forms are divided into those sections.

On the form, there is a field that gives the employer’s information. Such details include the Employer’s federal Identification Number and their state Identification number.

The other fields have employees’ information, including their income from the previous year. The total earnings of the employee from the employer are added, together with all the taxes from the employee’s salary.

The social security tax is also included.

Did the employee work for tips? There is a field showing the amount they have earned from those tips in the year.

When the employee files their taxes, the fee retained according to the W2 form is deducted from their tax duty. If the charge held was more than the amount the employee is supposed to pay, they may receive a refund.

The IRS W-2 Form

This form is used by the Internal Revenue Service to track an employee’s income and tax accountability.

If the employee’s salary on the taxes does not match with the profit on the W2 form, the IRS may audit them.

However, citizens are encouraged to disclose all their salary and incomes even if they are not in the W2.

Calculating your adjusted gross income involves taking your wages and adding any other taxable income. There is another form on which you report the total taxable income you get.

This form is known as 1099-DIV, for dividends, and 1099-INT for interests.

The next stage is subtracting any deductions made.

The deductions may include investment income, student loan interests, and traditional IRA contributions. After these calculations, you now have your adjusted gross income.

Now, you can find your adjusted gross income on a W2 from the IRS on