A W-2 form
A W-2 form is a document that
reports the total amount of compensation and taxes withheld for an employee
over the course of a tax year. It is issued by an employer to each of their
employees by January 31st of the following year.
Here's a breakdown of the
different sections of a W-2 form:
Employee Information The top portion of the W-2 form includes the
employee's name, address, and Social Security Number (SSN), as well as the
employer's name, address, and Employer Identification Number (EIN).
Wages, Tips, and Other Compensation This section of the form reports the total
amount of compensation the employee received during the tax year, including
wages, salaries, tips, bonuses, and other taxable income. It also includes the
amount of federal income tax, Social Security tax, and Medicare tax withheld
from the employee's paychecks.
Social Security Tax This section reports the total amount of
Social Security tax withheld from the employee's paychecks during the tax year,
as well as the employee's Social Security wages and tips subject to Social
Security tax.
Medicare Tax This section reports the total amount of
Medicare tax withheld from the employee's paychecks during the tax year, as
well as the employee's Medicare wages and tips subject to Medicare tax.
State and Local Taxes If the employee lives in a state or locality
that collects income tax, this section will report the amount of state and/or
local income tax withheld from the employee's paychecks during the tax year.
Retirement Plans and Other Benefits This section reports any contributions the
employee made to a retirement plan or other employee benefit plan, as well as
any contributions the employer made on the employee's behalf.
Miscellaneous Information The final section of the W-2 form includes
additional information, such as the control number assigned by the employer to
the form, and any other special codes or information that may be relevant for
tax purposes.
Employees use the information
on their W-2 form to complete their individual income tax return, which is due
by April 15th of the following year. The information on the W-2 form is also
used by the Social Security Administration and the Internal Revenue Service
(IRS) to track earnings and ensure that employees are properly taxed.
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