The Ultimate Guide to Reading and Understanding Your W2 Form
It’s the end of the year, which usually means your employer is busily preparing W2. forms The IRS requires employers to supply this form to their employees by late January.
Receiving a W2 is often kicks off tax preparation for individuals. If you switched employers or just started your first job, you may not be sure what to expect. After all, W2 forms come in a few different formats.
That’s why we created this handy guide to understanding your W2. Every W2 has the same information, so you’ll never need to feel confused again.
Table of Contents
Understanding Your W2 is Easy as A-B-C
The first thing to understand in your W2 form is the lettered boxes. The appearance depends on how your employer does payroll, note the experts at PayStubCreator. No matter which format your employer uses, these boxes contain the same information.
The lettered boxes are where you’ll find your identifying information. Box D is a control number that identifies your W2 in your employer’s records.
You’ll also find your Social Security Number, your employer’s tax identification number, addresses, and legal names.
You should always make sure your W2 contains your correct name and address. If you’ve made updates to any of your information, be sure to tell your employer.
W2 Form Explained by the Numbers
The next step in how to read W2 forms is understanding all the numbered boxes.
Each box reports a different part of your financial information. Box 1, for example, includes your total taxable wages. This includes:
- Salary and wages
- Tips you reported
- Bonuses
All forms of taxable compensation are included here.
Box 2 reports on withholding. Box 3 shows the part of your wages subject to the Social Security Administration tax. Box 4 is the total amount of Social Security tax your employer withheld for you.
Boxes 5 and 6 deal with Medicare. Box 7 includes the amount of any tips you reported to your employer. Box 8 is for reporting tip income your employer allocated to you.
Reimbursements and Deferred Compensation
Boxes 9 through 12 are used to report on reimbursements and deferred compensation.
Box 10 reports any reimbursement for care expenses. If your employer provided dependent care, you’ll find the amount here.
Boxes 11 and 12 apply to deferred compensation. Box 9 should always be empty, as the credit associated with it ended in 2011.
State Taxes and Pension Plans
Box 13 can be a little confusing. Three check boxes appear in it, and they’ll be marked if you’re a statutory employee. They’ll also be marked if you participated in a retirement plan during the year.
W2 Box 14 codes extra tax information. This could be union dues, tuition assistance, or other fees.
Boxes 15 through 20 deal with state and local taxes. Box 18, for example, includes the total amount of wages subject to city and local taxes.
Make Tax Season Simple
Understanding your W2 doesn’t need to be difficult. Once you learn how to read W2 forms, you’ll be able to check them for errors and use them to prepare your taxes.
If you’re looking for more tips to make tax season less painful, we have plenty of advice just for you.