What Is Form W-2?
It’s tax filing season. Whether you have or have not filed your taxes, there is one tax document you should especially be familiar with if you have an employer. That document is Form W-2, also known as the Wage and Tax statement. It is a document that an employer is required to send each of their employees and the Internal Revenue Service (IRS) for each calendar year. The following will further break down Form W-2 and its importance.
Form W-2 reports an employee’s annual wages and the amount of taxes withheld from their paychecks. Employers are legally required to send out a W-2 for every employee to whom they paid a salary, wage, or any form of compensation to. To receive a W-2, you need to have earned at least $600 from an employer in a given year.
What taxes are withheld from an employee’s paycheck throughout a year listed on a W-2? Taxes withheld include Federal income tax, State income tax (depending on your state), Local income tax (depending on your municipality), Social Security tax, and Medicare tax.
When it comes time to file your taxes, it is important to know that tax documents are filed for the previous year. For example, your employer would send you your 2022 W-2 in January 2023 so that you can file your 2022 taxes during tax filing season. For 2023, tax filing season is from January 23rd to April 18th.
Besides wages and taxes, a W-2 lists other important information, such as your retirement plan contributions and deferred compensation from an employer in a non-qualified plan. Form W-2 is important to be familiar with if you have an employer.