Why W-2 Files are Crucial

24 May

W-2 forms are actually essential part for a lot of people's tax preparation process because it actually reports wages that are paid and taxes that are withheld by employers through the course of a year. An advantage with it with other tax-related forms is that you don't need to fill out a W-2 form. You will just receive it and then use it.

One of the things which you should know is that you are actually not the only one that the employer prepares the W-2 form. The Social Security Administration, IRS and you will get a copy of it, which in fact makes it unwise when you plan on under-reporting your wages or if you over-report taxes which were withheld. You should be aware that you can expect a W-2 form if you are actually an employee and likewise earned a particular amount or more or if you ever have an any amount you have withheld. When you are earning money as an independent contractor, you could in fact expect a 1099 form compared to a W-2 from an employer as long you made more than their specified or particular amount.

If you receive a W-2 form which the employer need you to send by the end of January, you will then get multiple copies of it. This is so you could keep one as your record and include a copy with the federal tax return and your local, city or your state tax return.

It is really important to consider reviewing your W-2 form so you will be able to get an assurance that the information is really correct. If ever your name is misspelled or that your Social Security number is wrong or is missing, the IRS is going to have troubles in matching up the records to what you have earned and paid on what you have reported. It could delay the processing of your return as well as trigger an audit. To learn more, check What Happens If You Don't File A W2 Statement?

Why is it Important?

You actually are aware that those that are self-employed should make estimated tax payments throughout the year as well as assume that unlike it, there's really no need to pay your taxes until April 15. But this is however not the case. This is the reason why employees will also make regular tax payments throughout the year. This actually is what happens if the employer withholds taxes from your paycheck. They are actually withheld and is then sent to the IRS. Check Why You Need To File A W2 Statement for more info.

This in fact is the reason as to why you should take care and understand your W-2 form because it will help you know if you are going to get a tax refund check on that year as well as on how big it's going to be. Check https://www.wikihow.com/Prepare-a-W%E2%80%902-for-an-Employee for other references.

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