What You Need To Know: W2 Tax Forms And How They Affect Your Taxes

What You Need To Know: W2 Tax Forms And How They Affect Your Taxes

Tax season is around the corner and understanding what your employer is reporting on their W2 can help you stay compliant with the IRS. Learn about W2 forms and how they affect your tax filing in this blog article!

What is the W2 Tax Form?

The W2 tax form is a document that your employer uses to report your annual wages and taxes withheld from your paychecks. This information is used to calculate your income tax liability for the year.

Your employer will send you a W2 form by January 31st each year. If you move during the year, be sure to update your address with your employer so that you receive your W2 form in a timely manner.

The W2 tax form includes four parts:

Your personal information - This includes your name, address, and Social Security number.

Your employer's information - This includes your employer's name, address, and identification number.

Your wage and tax information - This section lists your gross wages for the year as well as any federal, state, or local taxes withheld from your paychecks.

Your employers signature - This provides verification that the information on the form is accurate.

Why do Employers report their employees income to the government on the W2?

Employers report employee income to the government for several reasons. The most common reason is that it is required by law. In some cases, employers may also want to voluntarily report income in order to comply with social security or other benefit regulations. Additionally, employers may use W2 forms to keep track of their employees' incomes for tax purposes.

The Income Section of a W2

Your employer is required to withhold money from your paycheck for federal income taxes. The amount of money withheld is based on the information you provide on your W-4 form. Your W-2 form shows the total amount of money withheld from your paycheck for federal, state, and local taxes.

The income section of your W-2 form includes your gross income, which is the total amount of money you earned during the year before taxes or other deductions are taken out. This figure is important because it's used to calculate your tax liability.

Your gross income is followed by your taxable income, which is the amount of income subject to taxation. This figure is important because it's used to calculate how much tax you owe.

The next line on your W-2 form shows the federal income tax withholding. This is the amount of money that was withheld from your paycheck for federal taxes. The final line on the income section shows your state and local income tax withholding. This is the amount of money that was withheld from your paycheck for state and local taxes.

Common Disclaimers

There are a few things you should know about W-2 forms before filling out your taxes. First, your employer is required to send you a W-2 form if you earned $600 or more from them during the year. If you didn't earn that much, your employer may still send you a W-2, but it's not required.

Second, the information on your W-2 form is used to calculate your taxes. This includes how much income you made, any taxes that were withheld from your paycheck, and any other deductions or credits that apply to you.

Third, if you're self-employed, you won't receive a W-2 form. Instead, you'll need to use a 1099 form to report your income and expenses.

Fourth, if you have multiple jobs or sources of income, you may receive multiple W-2 forms. Be sure to enter all of the information from each form when completing your tax return.

And finally, don't forget to sign and date your tax return before mailing it in!

Requesting A Copy Of Your W2 Form

If you're employed, your employer is required to send you a copy of your W2 form by the end of January. You'll need this form in order to file your taxes. If you don't receive your W2 form, you should contact your employer as soon as possible.

You can also request a copy of your W2 form from the IRS. However, it will take longer to receive your form if you request it from the IRS. The IRS will first send a notice to your employer asking for the form. Once your employer sends the IRS the form, the IRS will then mail it to you.

Conclusion

W2 tax forms are a vital part of the tax filing process for employees around the country. W2 forms provide critical information about an individual's income, which is used to calculate taxes owed and refundable credits. It's important to understand your responsibilities when it comes to W2s in order to make sure that you don't miss out on any valuable deductions or credits that could reduce your overall tax liability. With this knowledge, taxpayers can be better prepared when it comes time to file their taxes and hopefully save more money throughout the year!