The W-2 form, (or the Wage and Tax Statement, if you want to be formal), is the main form you need to fill in this coming tax form if you are an employee, and not self-employed. These are the things you need to know to fill it out this tax season:
Let’s Start from the Basics:
-Don’t confuse the W-2 with the W-4. What’s the difference? A W-2 is a form you get from your employer, which you need to file. The employer reports your salary on the W-2. The W-4 is a form you need to file for your employer, in which you report your personal and financial status. You employer uses the W-4 to determine your withholding tax rate.
-The W-2 is really important. For most employees, this is the form that would determine your tax bill the most, and your refunds.
You HAVE to File a W-2
The W-2 states how much you’ve earned, and how much you’ve already paid in withholding tax during the tax year. If you have additional forms to file, the W-2 will help you out, with lots of information.
If you didn’t get your W-2 yet, something’s wrong. Your employers has to send it out by January 31st. By the way, you need a seperate W-2 for each employer you worked for in the past year, and had paid you more than $600.
It’s Not Just About Your Salary
So, your W-2 talks a lot about what you’ve earned in the past year. But it also talks about your insurance expenses, the benefits you’ve got from your partner, and any other information that affects your tax picture. Some things would be deductible for you, or even give you credit. However, as employees, the responsibility to report your personal status is on you.
Don’t Keep Any Secrets
Employers are obligated to send copies of your W-2 to Social Security and the IRS. So no, as employees, it’s basically impossible to avoid paying your taxes. In fact, if you don’t fill out the W-2 form until April 15th, you’re going to get a long letter from the IRS pretty quickly.
Your Employer Can Make Mistakes
Imagine your company’s accountant working very very late on December and January, trying to fill out all the W-2’s for all employees. It’s almost midnight, after many cups of coffee, and they spell your name wrong. Or much worse - put a decimal dot in the wrong place. Sounds crazy? Well, it happens.
If you haven’t read your W-2 yet - it’s time to do it now. Read it carefully to track any mistake and don’t hesitate to ask for it to be fixed. You’re not bothering anyone - you’re actually doing them a favor. If the IRS catches a mistake, your employer would be penalized.
Read the Instructions!
Don’t be lazy. The forms come with thorough and straightforward instructions. Read them through if you’re not a veteran!