W-2 form
An IRS tax form provided by employers showing annual wages and taxes withheld — required for tax filing.
Example
“Her W-2 form showed $72,000 in wages and $14,000 in federal taxes withheld.”
Memory Tip
W-2 — your annual earnings summary from your employer. Keep it for taxes.
Why It Matters
The W-2 form is essential for filing your annual income tax return accurately. Without it, you cannot properly report your earnings to the IRS, and it serves as the official record of how much your employer withheld for federal and state taxes throughout the year.
Common Misconception
Many people believe they must receive a W-2 form immediately after the year ends, but employers have until January 31st to send them out. Additionally, some assume that the taxes shown on the W-2 are the final amount they owe, when in reality this is just what was withheld and adjustments may be needed during tax filing.
In Practice
Sarah works as a marketing manager and receives her W-2 in late January showing she earned 65,000 dollars in gross wages with 12,000 dollars withheld for federal income tax and 4,095 dollars withheld for Social Security and Medicare. She uses this form to file her tax return and discovers she is entitled to a 1,200 dollar refund because too much was withheld from her paychecks throughout the year.
Etymology
Named after IRS form W-2 — the wage and tax statement.
Common Misspellings
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Related Terms
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See Also
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