Form W-2: What Is It & Other Questions Answered

Form W-2: What Is It & Other Questions Answered
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Before you’ve packed your year-end holiday decorations or returned to work after a seasonal vacation, you may already be thinking of your next big celebration – the arrival of your anticipated tax refund. But before you start counting your money, you’ll have to start the refund ball rolling by first filing your tax return. And even before you put pencil to paper (or keystrokes to computer) to complete your tax return, you’ll have to wait for an essential component of the filing process: IRS Form W-2 (Wage and Tax Statement).

What Is a W-2 Form?

From the IRS, the W-2 definition is a form that documents your earnings as an employee along with other information such as the amount of tax that was withheld from your paychecks. You’ll typically receive your W-2 in January or February for the prior tax year. For example, the W-2 you receive in January 2019 reflects your income and withheld taxes for the 2018 tax year.

Form W-2 Vs. Form W-4

If you’re an employee, you rely on your employer to furnish you with a W-2 form each year. But your employer needs you to fill out IRS Form W-4 (Employee’s Withholding Allowance Certificate) first. The W-4 was probably part of the new employee packet that you received when you were hired. But you can also request a new W-4 to fill out and submit to your employer if you experience a change in your financial circumstances. For example, if you get married (or divorced), have a baby or if your spouse begins a new job (or loses a job), you may need to change the number of withholding allowances on your W-4. These allowances effectively let your employer know how much income tax to withhold from your paychecks.

When you receive your W-2 from your employer, the amount of taxes that your employer has withheld from your wages throughout the year is a result of the number of allowances you claimed when you completed the W-4 form. If you failed to provide your employer with a W-4 form, the IRS requires your employer to withhold federal income tax as if you were filing single with no withholding allowances.

What Are Withholding Allowances?

An allowance is not a dollar amount or a percentage of your earnings. It’s an actual number that you compute after completing the worksheets that accompany the W-4 form, which considers your marital status, number of dependents and other information. Each allowance that you claim reduces the amount of tax that your employer withholds from each paycheck, giving you more take-home pay. But the purpose of allowances is not to give you more take-home pay; it’s to fulfill the IRS income tax method of “pay as you go so you won’t owe.” Ideally, the amount of taxes taken out of your paychecks throughout the year offsets your total tax liability you’ll owe at the end of the year.

What Is IRS Withholding Calculator?

If you're trying to get the amount of your total W-2 federal income tax that's withheld each year to align as close as possible with the actual tax you'll owe at the end of the year, the IRS offers an online calculator tool. The IRS Withholding Calculator helps you perform a "paycheck checkup" to determine the correct amount of tax you should have withheld from each paycheck. Tax laws are in a perpetual state of flux, which could leave you owing a large tax bill if you don't adjust your withholding allowances to reflect recent changes in tax law. From IRS.gov, search for "IRS Withholding Calculator" to access this online tool.

What Are W-2 Form Fields?

Although your employer fills out your W-2, you’ll transfer some of the information to your tax return. This form has different fields organized into boxes, which include not only your identifying information but also your income and the taxes that were withheld from your paychecks during the tax year.

The amount in Box 1 represents your taxable income (including wages, tips and other compensation), which you’ll transfer to the wages line on your tax return. Box 2 shows the total federal income tax that your employer withheld from your paychecks during the tax year, which you’ll transfer to the federal income tax withheld line on your tax return. Box 3 represents that part of your income subject to employee Social Security tax and Box 4 shows the total amount that your employer withheld from your paychecks for Social Security tax. Box 5 represents the part of your income subject to Medicare tax, and Box 6 shows the total amount that your employer withheld from your paychecks for Medicare tax.

Other fields include distributions (such as payments to you from your employer’s nonqualified compensation plan) and other compensation you received (such as benefits you received from a dependent care assistance program). In Box 14, your employer reports miscellaneous information that doesn’t neatly fit into any of the other fields, including educational assistance payments, health insurance premiums and nontaxable income.

What Is Employer's W-2 Deadline?

You may be ready for your W-2 as soon as you ring in the New Year, but the IRS allows your employer until Jan. 31 to furnish this form to you. You may receive it sooner than this, depending on your employer’s issuing schedule and method of furnishing it to you. Some employers take the traditional route of mailing it to their employees; other employers insert W-2s in their employees’ January paycheck envelopes; and a number of employers provide W-2s electronically to their employees who consent in writing to receiving their W-2s this way.

Failure to Receive W-2 Form

If your employer mails your W-2 on Jan. 31, you should receive it by the first week in February. But if the first week of February has come and gone, and your W-2 is nowhere in sight, it’s time to contact your employer. It may be a simple oversight, such as an incorrect mailing address, or it may have gotten lost in the mail. You may want to ask your employer if you can pick up a copy of your W-2 at your place of business instead of waiting for it to reach you through the mail. If you still haven’t received your W-2 by the end of February (or if the information on your W-2 is incorrect and your employer has not yet corrected it), you may need to contact the IRS for help.

Calling the IRS

If your attempts to get your W-2 are unsuccessful, call the IRS at 800-829-1040. You can also schedule an appointment with an IRS representative at a nearby IRS Taxpayer Assistance Center (TAC). Find your nearest TAC by visiting IRS.gov and searching for "local Taxpayer Assistance Center." An IRS representative will advocate for you by contacting your employer and requesting your W-2 within 10 days. The representative will also tell you how to file your tax return without a W-2 if the tax filing deadline is fast approaching to make sure you file on time.

Filing Taxes Without a W-2

The IRS requires you to file a tax return by the filing deadline even if you haven't received your W-2. Otherwise, you’ll have to pay a late filing fee. But all you need to file a return without your W-2 is your last pay stub from the tax year and IRS Form 4852 (Substitute for Form W-2, Wage and Tax Statement). This form simply acts as a “stand-in” for your W-2 until you receive your actual W-2. You can download and print Form 4852 by visiting IRS.gov/forms and typing this form number in the search field. Estimate your wage and tax information as closely as possible on the form, using your last pay stub as a guideline. You don’t have to worry about calculating the exact amounts, because you can always amend your return after you receive your W-2 if your calculations are not exact.

Correcting Your Filed Tax Return

If you receive your W-2 after you’ve already filed your tax return using Form 4852 in place of your W-2, you can correct any estimating mistakes you may have made by submitting IRS Form 1040X (Amended U.S. Individual Income Tax Return). This is one form that you cannot submit electronically – you’ll have to mail a paper copy – but you can download and print it by visiting IRS.gov/forms and searching for the form number. After you complete Form 1040X, mail it to the IRS at the address listed on the form’s instructions.

Multiple W-2 Forms

You may receive more than one W-2 form for a tax year if, for example, you have more than one job at a time or if you change jobs during the year. You’ll also have more than one W-2 form if you work for an employer and you file jointly with your spouse who also works for an employer. No matter how many W-2s you have at the end of the tax year, you’ll only file one tax return, adding all the income amounts in Box 1 on each of your W-2 forms and entering the collective total on the wages line of your tax return.

To make sure you pay enough withholding tax (so you won’t owe an inordinately high amount of additional tax at the end of the year), the IRS recommends completing one of the worksheets that’s included with your W-4 form – the Multiple Jobs Worksheet. IRS Publication 505 (Tax Withholding and Estimated Tax) has more helpful hints for filling out your W-4 if you have multiple jobs. You can access this publication at IRS.gov by searching for the publication number. It covers a lot of territory, but if you search the left-hand menu, you’ll find information under “Multiple Jobs” and “Two-Earners, Multiple Jobs Worksheet.” Each of these menu items has a clickable link that takes you to the corresponding text.

Get Copies of Prior W-2s

You may need to retrieve a prior year’s W-2 if you’re qualifying for a loan, such as a mortgage loan or student loan, but your form is nowhere to be found. And in today’s digital world, even if you didn’t file a paper return, you may not be able to find an electronic copy of your tax return. The quickest way to retrieve a prior year’s W-2 is to contact your tax preparer, or even your employer, to get a copy of this form. You can also go straight to the IRS to get a free transcript of your tax return. A transcript is not an actual photocopy, but it contains a summary of the information you’ll need to document your income for a previous year.

Visit IRS.gov/transcripts to set up your free account and access your tax transcript online or request one by mail. The IRS offers numerous types of transcripts, but if you just need your W-2 information, request the “Wage and Income Transcript.”