Understanding your Form W-2

For most individual taxpayers, the Form W-2 is the most important tax document for tax filing season. The W-2, or the Wage and Tax Statement, reports your taxable income amount from your employer. The W-2 Form also reports the taxes withheld by your employer as well as social security and medicare payment amounts for the year.

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The W-2 is an obligation of the employer. Your employer must prepare your W-2 Form. Additionally, they provide copies of the W-2 to you and the IRS. The employer must deliver the W-2s by January 31 for the previous tax year. So, the employer must deliver its W-2s by January 31, 2020 for the 2019 tax year. If you do not receive your W-2 by mid-February, you should contact your employer. Note that many people elect to receive the W-2 electronically, and so, make sure to check if you made this election before escalating matters. Additionally, if you have multiple employers, make sure you receive a W-2 from each.

You should receive three copies of your W-2. The copies include: Copy B, C, and 2. You should attach Copy B to your tax return if you are mailing your tax return. If not, just keep Copy B for four years. Copy C is for your records and should be kept for four years. Copy 2 relates to your state return. Same rules apply to Copy 2 as Copy B.

Understanding the Lettered and Numeric Boxes on your W-2

The lettered boxes relate to identifying information, which includes social security number, EIN, addresses, and more. These should be self-explanatory.

The numbered boxes relate to your financial information.

• Box 1 reports your total taxable wages and salary from your employer. This should include other amounts like bonuses and other taxable compensation items.
• Box 2 reports the amount withheld from your paychecks for the tax year.
• Box 3 reports the amount of salary/wages subject to the social security tax. The social security tax applies to salary/wages up to $132,900 for tax year 2019.
• Box 4 reports the total amount withheld for social security. The social security tax rate is 6.2%.
• Box 5 reports the amount of salary/wages subject to medicare tax. Unlike social security, the medicare amount does not have a max amount.
• Box 6 reports the total amount withheld for medicare. The medicare tax rate is 1.45%.
• Box 7 & 8 apply to reported tip income.
• Box 9 N/A
• Box 10 relates to dependent care expense reimbursements.
• Box 11 reports non-qualified deferred compensation plan/non-government pension plan payments.
• Box 12 reports deferred compensation and other compensation. 
• Box 13 includes three check boxes relating to your statutory employment, your employer-sponsored retirement plan, and your employer's third-party insurance plan. 

Hopefully you now understand the Form W-2. You
should have no trouble reporting all your salary earned from your job/jobs. Please share with anyone confused about the Form W-2. For all questions and concerns, please comment below.