If you work for someone else, as an employee of a business or company, you should expect to receive a Form W-2 in the mail sometime between January and February. The form has a lot of little boxes and numbers on it, and is required to be sent to you by any employer who paid you at least $600 throughout the previous tax year.
This form is formally referred to as the Wage and Tax Statement, and details the amount your employer paid you in salaries, commissions, and bonuses, as well as how much you had in tax withholdings. This form is different than the W-4, which you file with your employer to tell them how much you want in taxes taken from your salary each paycheck. If you freelance or work on contract, you won’t receive a W-2. Instead you’ll get a 1099 from your clients.
The W-2 is a necessary component to filing your tax return. This form has everything you need to complete your return, and all the information on the form determines whether you’re entitled to a tax refund. The following six facts about your W-2 will help you file your return more efficiently and accurately.
- The W-2 is necessary to complete your taxes correctly
This form has all the information you need to complete your tax return easily. It includes the amount you earned in the last tax year as well as how much in taxes you paid on that income, including Social Security and Medicare. When you file your return, you will copy much of the information from this form.
- It’s not solely focused on your earnings
While the W-2 does document your salaries, wages and tips, it’s not all it shows. The amount your contributed to a retirement plan, how much your employer paid for health insurance, and the amount of dependent care benefits are among some of the other information you’ll find on a W-2. This data plays an important role in your taxes, as things such as retirement contributions may not be taxable.
- Copies are in circulation
Your employer is required by law to send copies of your W-2 to the Social Security Administration (copy A) and your state and local tax authorities (Copy 1). You need to ensure you are reporting the information accurately, because it will be checked against the copies received by other organizations. Avoid a headache and don’t try to “leave out” any information to lower your taxes. Your information will be compared, and the IRS will know. And likely, you’ll get an annoyed letter and a few months of extra aggravation.
- Your employer must send it by Jan 31
The IRS gives your employer until the end of January to “furnish” you with your W-2. In this case, the term “furnish” is equivalent to having it post-marked by January 31st, which means you may not receive it until sometime in February. Your employer also has the option of sending you a copy electronically, although it isn’t required.
If you quit your job, you’ll still get a W-2 by January 31 unless you ask for it earlier, and your employer must provide it within 30 days. Even if you die, you’ll still get a W-2 for the year.
- Check for errors
It’s possible your employer may make a mistake on your W-2 – either a wrong dollar amount, or a wrong box checked – so you need to double check your form to ensure all the information is accurate. You will need to be reissued a new W-2, and it will cost you some time. However, your employer may be fiend for certain errors, like a dollar amount or a significant item in your address.
- Ensure the correct address
You should receive your W-2 by Valentine’s Day, but if not, your employer might not have the right address. You can call the IRS at 1-800-829-1040 and provide the required information, including when you worked and an estimate of your salary.
Your tax return is due by the dealing in April, regardless of when you get your W-2, so you should ensure you get it done on time. Extensions are possible, though it may be more beneficial to estimate your earnings and withholdings. The IRS may delay your return, halting your refund, as processing your information and verifying it may take longer. You may need to amend your return if your W-2 shows up after you filed.