What is IRS form W-2?
The W-2 IRS tax forms are used by employers annually to report wage and tax information to their employees. The form shows how much employees made during the tax year. It also includes how much was withheld from these earnings for federal and state tax purposes. The W-2 IRS tax forms are also used to report the Federal Insurance Contributions Act (FICA) tax, which funds programs for retirees and the disabled.
Why do I Receive Form W-2?
Businesses are required to send the W-2 tax forms to their employees by the end of January. This is because employees must finish their taxes by the middle of April. They need the information on the W-2 IRS tax forms to prepare their taxes. If the taxpayer doesn’t finish filing their tax forms on time, there could be penalties. Luckily, software makes filling the W-2 IRS tax forms out easy. This means employees get them sooner.
Other Information on Form W-2
Aside from wages and federal and state taxes, W-2 tax forms contain information about local taxes. Not all workers will have local taxes taken out, however. It all depends on where they live. In fact, local tax status might even change each year.
If an employee had Medicare withheld, the W-2 shows how much. Also listed is any Medicare wages and tips. The employee’s Social Security Number and Employee ID Number are available, too, to identify that employee to the IRS.
Employees will usually get three copies of the W-2 tax forms. One is used for federal taxes. Another copy is for state and local taxes. The third is for the employee to keep for their own records.
There are three other copies made of the W-2 tax forms. One is sent in by the employer to the Social Security Administration. The second is sent in by the employer to the local and state tax authority. The last copy of the W-2 tax forms is held by the company for their records.