What is the W-2 Form?
The W-2 form is the document an employer is required to send to each of their employees and the Internal Revenue Service (IRS) at the end of the year. The form reports the employee's annual wages and the amount of taxes withheld from his or her paychecks.
Employer Obligations for the W-2 Form
An employer is legally required to send out a W-2 Form to every employee to whom they paid 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 Jan. 31 each year, so the employee has ample time to file his or her taxes before the deadline (which is April 15 in most years).
Tax documents are filed for the previous year. For example, if you receive a W-2 Form in January 2019 it reflects your income for 2018.
Components of the W-2 Form
Every W-2 has the same fields, no matter 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 employee's total earnings from the employer for the year are included, of course, along with the amount withheld in taxes from the employee's paychecks, separated into the withholding for federal income tax, Social Security tax and more. If the employee also works for tips, a field shows how much money in tips the employee earned for the year.
Related Tax Documents
A W-4 is a form that individuals complete for withholding purposes; the employer uses its information to determine how much tax to withhold from the employees' paychecks. Contracted employees must fill out a W-9 Form when they start working for a company. If they complete $600 worth's of work or more for the company in a year, the company issues a 1099 Form showing the earnings and deductions made. Students receive a Form 1098 for any year in which they pay interest on college tuition or student loan.