Useful Information Concerning W-2 Form

24 May

A W-2 form is a type of document which outlines the amount of tax withdrawn from your annual income and is used to report your federal and country's taxes.  Form W-2 is used by the employers to report the wages and salary of their workers for the year as required by the IRS.  Note that W-2 also serves to report your country, government and other taxes which are deducted from your salary.  When making your tax return; you need to have the data from your W-2 form. It is imperative to understand that when you are preparing your tax return, you will need to have all the information from your W-2 form.  The IRS has it that each employer must present to their workers the W-2 form before January 31 after the close of the tax year which is mainly on December 31 thus avoiding lateness.  It is essential to realize that W-2 form is only for the people who are employed.  W-2 form is portioned into boxes with each one of them representing various subjects related to your salary. To learn more, check What Happens If You Don't File A W2 Statement?

Box 1 of W-2 form show the yearly income with the government tax withdrawn from it in box 2.  Since it is only a part of your salary which is subject to the social security tax, you will get that box 3 reports an amount which is less than your entire wage for the year.  Other boxes which are on W-2 form outlines the payments subject to social security taxes and Medicare tax which are withheld and details on your state income tax withholding, if applicable.  It is imperative to understand that when an employer deducts specific amounts from their employee's salary for government income taxes, they are required to submit them to the IRS throughout the year.  IRS require that every worker to make payment throughout the year which is a tedious task but the employer steps in to take care of it.  When you prepare your federal return and calculate your tax for the year, the withholding amounts your boss reports on the W-2 must be deducted from your tax payments. Check Why You Need To File A W2 Statement for more info.

After performing these calculations, you will know whether you will get a refund or make an extra payment.  When you record a state tax return, same calculations are required for the amount deducted to clear your state income taxes.  It is imperative to know that the identifying part of the W-2 form is a useful tracking component.  When the salary you record on your taxes fails to match the information on your W-2, the IRS will demand to know the reason.  The IRS will compare the reported payment information with your employer's cooperate tax return to eliminate errors.  It is prudent to know that IRS analyzes your W-2 form and check whether you have paid the taxes or not and the call you if you fail to file the tax returns. Check for other references.

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