Tax planning is an important task that takes demands quality time and energy. If we understand the technicalities behind every jargon in financial statements and wages, tax filing becomes easier at the end of the calendar year. This article will focus on helping you to understand Form W-2, Wage and Tax Statement.
What is the Form W-2?
As a part of the Employer-Employee relationship, Form W-2 is completed by employers describing the earnings and taxes withheld from the employees for a particular year. The United States income tax system uses this form as information from the employers for their employees while filing taxes.
Form W-2 Deadlines:
Employers must complete and provide this form to the employees by Jan 31st of the calendar year. If a person has worked with multiple employers within a year, he/she will receive forms from each employer. If a single person has worked for a single employer in multiple states, the employer needs to provide multiple forms for each state. Some employers prefer to have multiple rows of states in each or all forms. As an example your employer(s) must have given you a W-2 form for the year 2009 – 10 by January 31st, 2010.
How to Read Form W-2:
Before filing the forms with authorities, it is very important to read if the information provided in Form W-2 is correct.
Box a – f – Your personal information (Check for your SSN)
Box 1 and 2 – Wages, Tips, Federal Income Tax withheld for the year
Box 3 and 4 – Social Security Wage and Tax withheld
Box 5 and 6 – Medical wages, tips and Tax withheld
Box 7 and 8 – Tips that were not reported to the employer and tips allocated by the Employer
Box 9,10 and 11 – Advance EIC, Dependent care benefits, non qualified plans
Box 12 a -12 d – For Reporting
Box 13 and 14 – Statuary Employee, Retirement plan, Third-party sick pay
Box 15,16 and 17 – State Wage, tips and Income Tax
Box 18,19 and 20 – Local Wage, tips and Income Tax, Name of the locality
Correcting Form W-2:
If you see any error in the form, please inform your employer immediately. The employer will correct the information and issue a new W-2. If you have not filed your taxes, you can use the new form. If you have already filed for a tax return, you need to file an amended form again with the IRS. If so, the new form should have a term ‘corrected’ written by the employer.
You can file your taxes online for refund purposes. If the finance statements are confusing and taking too much of your time, it is advised that you contact a finance specialist or an expert for additional question and further help with tax filing. Even if an auditor is helping to file your taxes for refund, it is very important that you understand the technicalities of Form W-2, and other related information.