If you’re among the ranks of many taxpayers who work for an employer, IRS Form W-2 (Wage and Tax Statement) is a preliminary step toward filing your tax return each year. Learning how to decipher your W-2 is a journey that takes you through a series of lettered fields and numbered boxes. It’s the information contained in the numbered boxes that you’ll transfer to your tax return as you figure the amount of income tax you owe. While each box in
W-2 Box 14 Vs. 12
The primary difference between
W-2 Box 12
The breakdown of entries included in
Visit IRS.gov/forms, click on the search icon at the top of the page and enter "instructions for Form W-2" to find the document that contains this information. You'll be able to review all the box 12 codes and their corresponding entries for the W-2.
W-2 Box 14
Line 14 on the W-2 may document anything from union dues to state disability insurance taxes withheld.
New 1040 Tax Form
When you transfer the figures on your W-2 to your tax return, you'll choose among different types of 1040 tax returns to report your income and other tax information. But beginning with the 2019 tax year, you'll be able to use only one 1040 form. This new tax return consolidates all the information from IRS Form 1040, Form 1040-A and Form 1040-EZ into one streamlined form.
Review W-2 for Accuracy
Mistakes happen. When you receive your W-2 from your employer, review it to ensure its accuracy. If you find any mistakes, you'll be able to notify your employer and get a corrected copy before filing your tax return. The IRS recommends that you perform a "paycheck checkup" to make sure your employer withholds the correct amount of income tax from your paychecks. This is particularly important when there have been recent changes to tax laws, such as the Tax Cuts and Jobs Act. But it's also a valuable exercise if you experience a significant change to your tax situation such as changing jobs, increasing the size of your family or itemizing your deductions. Find this online tool by visiting IRS.gov and searching for "tax withholding calculator."
Victoria Lee Blackstone was formerly with Freddie Mac’s mortgage acquisition department, where she funded multi-million-dollar loan pools for primary lending institutions, worked on a mortgage fraud task force and wrote the convertible ARM section of the company’s policies and procedures manual. Currently, Blackstone is a professional writer with expertise in the fields of mortgage, finance, budgeting and tax. She is the author of more than 2,000 published works for newspapers, magazines, online publications and individual clients.