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Main Dictionary W

W-2 Form

Form W-2 or the Wage and Tax Statement is an official paper. The form contains the earned amount of money by an employee during the year and taxes that were withheld from it. Every end of the year an employer is obligated to send it to every employee and also to the IRS (Internal Revenue Service). Any person may be called a W-2 employee if his or her employer deducts his or her taxes and gives in the information to the government.

Who is responsible for submitting Form W-2

Every employer is obligated to send the W-2 form to all employees (except for self-employed workers or contracted ones as they have a different tax form) he or she provides with salary or other kinds of compensation. Employees must have enough time to report about his income taxes, before the official deadline, which comes on Apr. 15, thus they must get the W-2 form before or on January 31.  

During the year each employer has their crucial dates as well. Every month employers are obligated to inform FICA or Federal Insurance Contributions Act about employees' taxes. Then, before or on January 31 they are also obligated to submit the W-2 form and W-3 form to the SSA or the Social Securities Administration, thus SSA is able to calculate an employee’s Social Security benefits. 

It’s worth noting that all tax documents are submitted for the last year. For instance, if a worker gets a W-2 form at the end of January 2020, it contains information about the worker's earnings in 2019.

Order of submitting Form W-2 for employees

In case you’re an employee the W-2 form is sent to you at the right time every year by your employer. Also, you’ll get Form W-4 (tax form for Internal Revenue Service). The W-4 form provides employers with essential information, whether people are married or not, do they have dependents, etc. These facts help to calculate what amount of tax should be withheld. 

Preparing information about earning taxes involves also filling a Form 1040. In this form an employee must fill in the date’s gaps. The needed date can be taken from the W-2 form. Employees may put the date in the W-2 form by hand or it may be put electronically from the Form 1040, since currently many special software exists to prepare tax information. 

What data may be found in W-2 Form

The W-2 form is a universal form for every company. As employees are required to report their taxes in every level there are two types of W-2 form. The first is federal and the second is state. In the form there is information about the employer, its EIN (or Employer Identification Number) and the state ID number of the employer. Also there is information about employee’s earnings for the last year. 

An employee’s income must be recorded together with withhold taxes, thus it may lately be separated into different types of withholdings. Also, if people have more than one place to provide them W-2 form, people are not allowed to input them together. 

There is a gross tax liability, which is a certain amount of money that an individual must pay to an organ that is in charge of taxes (for example, Internal Revenue Service). Thus, at the time a person submits tax information, the needed taxes are deducted from the person's gross tax liability. Normally, if the amount of deducted tax is higher than it should be, money will be refunded.

The W-2 form is also useful to monitor an individual’s earnings and tax liability. The monitoring is conducted by the Internal Revenue Service. In case they notice that paid taxes don’t correspond to the earnings, they may carry out an audit. Thus, employees are obligated to inform about all their income. 

Other tax papers

There are several related to W-2 form documents:

  • Form W-4. The form is filled by employees as soon as they begin to work for an organization, basing on the facts from the form an employer estimates how much taxes an employee should pay. 
  • 1099 form. The form is needed when an organization pays an employee at least 600 dollars or more. The form reports the income and deductions.
  • Form W-2G. This tax form an individual may get after winnings from gambling.
  • 1098-E form. The form is received by students for years they need to pay back interests for a federal student loan.
  • 1098-T form. The form is received by students as well, but unlike the previous this one reports about a student’s tuition expenses, which let students get tax deductions or credits
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