W-2 Form


DEFINITION of 'W-2 Form'

The form that an employer must send to an employee and the Internal Revenue Service (IRS) at the end of the year. The W-2 form reports an employee's annual wages and the amount of taxes withheld from his or her paycheck.


A W-4 is a form that individuals complete for withholding purposes, whereas a W-2 form is for employers to fill out. The employer must provide the employee their W-2 form by the deadline set by the IRS. Although W-2 Forms have traditionally been filled out on paper, and many people consult tax specialists to make sure everything is correct and that they're getting the highest possible deductions. Websites such as TurboTax allow people to electronically file their taxes without consulting an accountant, even those who have never filed taxes before.

Tax documents are filed for the previous year. For example, if you receive a W-2 Form in January of 2015, it reflects your income in 2014.

Role of the Employer

An employer legally must send out W-2 Forms to each of its employees to whom they page a salary, wage, or other form of compensation. This does not include contracted or self-employed workers, who must file taxes with different forms. The employer must send the employee the W-2 Form on or before January 31st each year so the employee has ample time to file his or her taxes before the deadline, April 15.

Components of the W-2 Form

Chances are you've been issued a W-2 Form at some point in your life. Each W-2 has the same fields, no matter what the employer. W-2 Forms are divided into state and federal sections, since employees must file taxes on both levels. There are fields that provide the employer's information, including the company's Employer Identification Number (EIN) (federal) and the Employer's state ID number. The remaining fields mostly focus on the details of the employee's income from the previous year.

The fields on a W-2 Form provide room for all types of income. There is a box that states the total amount of money the employee made from that employer in the year in question, which is the same for federal and state. Other fields indicate the amount of taxes that were withheld from the employee's paychecks, separated by federal income tax, social security wages, social security tax, and more. There are also fields that show how much money in tips the employee reported for the year, which applies to any jobs that allow the employee to collect tips.

For a detailed video on the components of a W-2 Form, watch the video W-2 Forms.

Similar Tax Documents

While a W-2 is the most common tax form, there are others that apply only to specific situations. Contracted employees must fill out a W-9 Form prior to work, and they are given a 1099 Form by the company for which they provided service, but only if they completed $600 worth of work or more. Students receive a Form 1098 if they paid interest on college tuition or a student loan that year.

  1. Withholding Allowance

    An allowance an individual claims on a W-4 Form. A withholding ...
  2. Withholding Tax

    1. Income tax withheld from employees' wages and paid directly ...
  3. Taxes

    An involuntary fee levied on corporations or individuals that ...
  4. Sales Tax

    A consumption tax imposed by the government on the sale of goods ...
  5. Employee Stock Option - ESO

    A stock option granted to specified employees of a company. ESOs ...
  6. Corporate Culture

    The beliefs and behaviors that determine how a company's employees ...
Related Articles
  1. Taxes

    Before You Visit Your Tax Preparer: Do This

    The earlier you start preparing your tax records and documents, the more likely you are to have a smooth tax return experience – and all the tax benefits you're due.
  2. Retirement

    Tax Tips For The Individual Investor

    We give you seven guidelines to help you keep more of your money in your pocket.
  3. Taxes

    Surviving The IRS Audit

    Keeping thorough records and knowing the penalties make this experience easier than you'd expect.
  4. Taxes

    Should You File An Early Tax Return?

    When it comes to filing your taxes, it can often pay to wait until the deadline.
  5. Taxes

    Next Season, File Taxes On Your Own

    Master these fundamentals and you'll be doing your own taxes with minimal stress.
  6. Taxes

    3 Common Tax Questions Answered

    We clarify some rules that often puzzle taxpayers.
  7. Taxes

    Filing Your First Tax Return

    Tax time can be intimidating - but knowing these tips can ease the process and get you a hefty return.
  8. Entrepreneurship

    7 HR Basics for Small Businesses

    Whether or not you are a fan of human resources, every employer needs to know the answers to these questions.
  9. Taxes

    The Purpose Of The W-9 Form

    The W-9 form provides key data your clients need if you're an independent contractor. Just be sure you're not really an employee who should fill out a W-4.
  10. Savings

    A Quick List of FSA Eligible Expenses

    The ABCs of FSAs: What you can and can't use your Flexible Spending Account funds for.
  1. Can LLCs have employees?

    A limited liability corporation (LLC) can have an unlimited number of employees. An employee is defined as any individual ... Read Full Answer >>
  2. Do flexible spending accounts (FSA) funds roll over?

    An individual can utilize an employer’s cafeteria plan of employee benefits to establish a flexible spending account (FSA). ... Read Full Answer >>
  3. Are Cafeteria plans subject to FICA, ERISA or FUTA?

    Cafeteria plans are employer-sponsored benefit plans that provide both taxable and nontaxable, or qualified, benefit options ... Read Full Answer >>
  4. Does the IRS charge interest on penalties?

    The Internal Revenue Service (IRS) charges interest on any overdue taxes owed, but it does not charge interest on penalties. ... Read Full Answer >>
  5. Are tax shelters legal in Canada?

    Most tax shelters are legal in Canada. However, there have been illegal tax shelter scams that the Canada Revenue Agency ... Read Full Answer >>
  6. Can the IRS garnish your tax refund?

    Federal law states that only state and federal agencies, such as the Internal Revenue Service (IRS), are allowed to garnish ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  2. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  3. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  4. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  5. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
  6. Discount Bond

    A bond that is issued for less than its par (or face) value, or a bond currently trading for less than its par value in the ...
Trading Center