You’ve been watching the mailbox every day for your Form W-2. Maybe you’re due a refund and you plan to put the money into a new big-screen TV for Super Bowl Sunday. Perhaps you aren’t sure whether you’re getting a refund, but you want to file so you’ll know how much to budget for your summer vacation. It may simply be that January has turned into February and you’re starting to worry your form won’t arrive in time.
Whatever the case, you actually don’t have to wait until the form arrives to calculate how much you can expect to be deposited in your bank account once you file. You can estimate your W-2 by gathering your paychecks and using one of the many online calculators available.
Estimating Your W-2
When you file your taxes, you’ll use your W-2 forms to report the income you earned and the taxes you paid. This can seem complicated on the surface, but it’s actually quite easy, especially if you’ve only received income from one employer during the tax year. Your W-2 details the wages, tips and other compensation for the year, as well as the federal income tax withheld and any nontaxable income like dependent care benefits and nonqualified plans.
The first place to look to begin estimating your taxes for the year is your paystub. You should be able to access a copy of this even if your check is direct deposited, although it may only be visible on your company’s HR portal. If you still receive a physical copy of your paycheck, the important information is on the piece of paper that tears away from your check before you deposit it. It includes your pay and tax information to help you see exactly what you’re being paid.
Analyzing Your Paystub
If possible, track down your final paycheck of the year and take a close look at the paystub. If your employer uses a standard payroll processing method, your paystub tracks how much money you’ve been paid so far for the tax year. The final stub of the year shows exactly how much you were paid all year, as well as how much taxes were withheld. This is listed as “YTD,” or year to date.
Jot down your YTD salary, as well as your YTD withholdings, including Social Security and Medicare. If you’re in a state with income tax, also jot down your state income tax withheld for the year in case you want to figure your state income tax after you’ve determined how much you’ll get back from the IRS. If you received any tips or bonuses, jot down these numbers as well, since they’ll also come into play when you’re estimating your taxes.
Your W-2 details the wages, tips and other compensation for the year, as well as the federal income tax withheld and any nontaxable income like dependent care benefits and nonqualified plans.
Using Tech Tools
Once you have the figures you will see when your W-2 finally arrives, it’s time to start figuring your taxes. The easiest way is to find a W-2 estimator online. Using one of these tools, you simply input information about your filing status, number of dependents, wages and the amount of state and federal income tax withheld. This will help determine how much you can expect to get back when you file.
It’s important to note that these calculators might not be exact, especially if you aren’t sure about all the credits you might qualify to take. However, if you’re looking for a ballpark figure or, more importantly, interested in making sure you’re actually getting a refund rather than owing hundreds of dollars, these tools can be a great first start. Then when you do receive your form and start preparing your taxes, you’ll know what to expect.
Requesting a Form
Of course, even as you’re estimating your taxes, you’re likely concerned about the fact that you still don’t have a form in hand as the deadline approaches. Whether you’ve lost it or you never received it in the first place, the first course of action is to check with your employer. Although the IRS requires employers to either mail or hand-deliver W-2s to employees by the end of January, many employers now provide them electronically, as well. You may find that you can simply log in to your company’s HR portal and get all the information you need.
Even if you’re no longer employed with one of your income sources during the tax year, your former employer is not released from the obligation to send you a form. If the company is still in business, don’t feel shy about reaching out to politely state that your form must have gotten lost somewhere along the way. It could be that the employer merely forgot to send forms to former workers. If your employer is no longer in business, though, you may have to handle things on your own.
When to Expect a Form
In some instances, you may not be sure if you’re even entitled to a form. If you worked as a W-2 employee for an employer, he’s required to send you a W-2 form, even if you only made $50. You’ll know you’re a W-2 employee because when you started the job, you completed a Form W-4 to tell your employer how much to hold out of each paycheck for taxes. You also meet the IRS’s requirements to be an employee rather than a contractor, including working set hours, having your work methods dictated and having all supplies necessary to do the work provided by the company that hired you.
If you’re an independent contractor, on the other hand, you will receive a completely different form at tax time, and only if you make more than $600. Those who are self-employed receive Form 1099-NEC, which they then use as the complete their taxes. No taxes are withheld for independent contractors, so they’re responsible for paying that in the form of self-employment tax.
It’s also important to note that the IRS expects independent contractors to report every dollar they earn, even if the amount is far less than $600 and no form is sent.
Reporting an Employer’s Failure to Send
By late February, if you’ve contacted your employer and looked through your emails for portal instructions to no avail, the IRS directs you to give them a call at 800-829-1040 and request a W-2 Complaint. This will initiate a letter to your employer asking that they provide a form within 10 days. The letter will also contain a caution that there are penalties attached to failing to submit a form to a qualifying worker.
At the same time your complaint is initiated, the IRS will also send you a Form 4852, which is a substitute for your W-2. If a couple of weeks go by and you still haven’t received your W-2, you’re expected to complete this form using your paystubs. Here you’ll input your earnings and withholdings so that the IRS can determine whether you paid enough taxes in.
You can use this form to file your taxes, submitting it in place of your W-2 for that particular job. If your W-2 arrives after you’ve filed using this form and you find the amounts differ, you can amend your taxes using Form 1040X.
Speeding Up Your Refund
If you’re anxious about your forms, you probably are eager to receive your refund. The fastest way to get that amount into your account is to file electronically. According to the IRS, you can expect to receive your e-filed refund within 21 days. Paper-based returns take much longer. In fact, the IRS tells taxpayers that they won’t even see the status of their refunds on paper versions for at least four weeks.
Slower processing isn’t the only thing slowing down paper-based refunds. Even a simple math error can slow down your refund turnaround time since processors must slow down to correct them. If your tax return contains errors that require the IRS to ask questions, which will be done by postal mail, this means you’ll have to wait for the questions to arrive to respond. In addition to e-filing, you can also speed things up by requesting that your refund be deposited directly rather than mailed.
Monitoring Your Refund Status
Once you’ve submitted your return, the waiting begins. This can be excruciating if you need the money. If you submitted electronically, you should have already received a notification that your return was submitted and approved. After 24 hours have passed, you can start watching the IRS’s Where’s My Refund? page, which generally updates every night.
To get started with Where’s My Refund? you’ll need your Social Security number, filing status and the exact amount of your refund. Once you have a notification that your refund has been processed, you can log into your bank account, provided you chose direct deposit, and wait until it appears as “pending.” If you sent your return by postal mail, your wait will be considerably longer. The IRS directs you to begin checking the Where’s My Refund? page four weeks after you put it in the mail.
For electronic filers, if 21 days pass and your refund still isn’t in your account, call the IRS to check on it. There may be questions about your return. Paper filers will need to wait six weeks to pick up the phone. You should also make a phone call if you get a message to call when you check your status on the Where’s My Refund? page.
Calculating Next Year’s Taxes
Lacking a W-2 isn’t the only reason to use a tax calculator to predict your taxes. If you don’t think your income or circumstances will change from this year to next, the results of your tax return next year will probably be very similar to this year.
If, however, you anticipate some changes, you can use the IRS’s withholding calculator to determine how much you should have withheld. Since withholding takes place starting Jan. 1, though, it’s important to do this as early as possible during the tax year for the best results. If you check withholdings halfway through the tax year and adjust based on what the calculator tells you, you should complete the process again in January of the next year to make sure you’re having the correct amount withheld for the full tax year, rather than for just a portion of the year.
Starting in 2020, there's a redesigned Form W-4, and it no longer includes allowances. This change is intended to increase simplicity and transparency. You must use the new form to adjust withholding from your pay dated January 1 2020 or later. Bear in mind that you can no longer claim personal exemptions or dependency exemptions; the employer will now work this out.
To calculate your withholding, you’ll first need copies of your most recent paystubs in front of you. You should also have the most recent year’s Form 1040. The more accurate the information you provide, the more accurate the final number will be. The calculator is designed for those working salaried positions and filing simple taxes, so those with more complex tax situations will need to determine their future tax obligations using the estimator found in Publication 505.
- IRS: Form W-2
- UUPHost: Pay Stub Example
- 1040.com: Free Tax Calculator
- IRS.gov: Topic Number 752 - Filing Forms W-2 and W-3
- IPS: The Difference Between a W2 Employee and a 1099 Employee
- IRS.gov: Refunds
- IRS: IRS Withholding Calculator
- IRS. "(Circular E), Employer's Tax Guide." Page 21. Accessed June 13, 2020.
- Social Security Administration. "What Is FICA?" Accessed June 13, 2020.
- IRS. "FAQs on the 2020 Form W-4." Accessed June 13, 2020.
Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a ghostwriter for a credit card processing service and has ghostwritten about finance for numerous marketing firms and entrepreneurs. Her work has appeared on The Motley Fool, MoneyGeek, Ecommerce Insiders, GoBankingRates, and ThriveBy30.