Do You Know How to Read the W-2 Form
Are you among those taxpayers who have trouble in understanding and reading W-2 form? Should you find this article interesting, then you are advised to continue perusing this article to get more information about this form and its significance to taxpayers.
Since the tax season is just around the corner, there are lots of companies, ordinary individuals and employees who are cramming to get it done and file it timely. Nevertheless, you can also find some taxpayers who are confused on some tax forms and W-2 is among them. In case you are an employee, then surely W-2 tax form is one of the vital tax forms that you should understand and should comply. Whether you are the one preparing the tax return or you have tired some professionals to do it, you need to understand what are written in the W-2 form. Always remember the significance of reading and understanding all the stipulations found in these forms and its impact to taxpayers.
What W-2 Tax Form Is?
Wage and statement form is one IRS tax form issued by an employer to its employee. Companies have particular insurance, withholding and reporting requirements for their workers which are somewhat different from that of independent contractors. In here, employees affixed not their position or time worked but their earnings. In the United States of America, companies are ordered to issue their employees W-2 forms if they pay them at least six hundred bucks, in taxable benefits, cash or its corresponding equivalents. This form is also used in noting the employees’ withholding taxes, Social Security and Medicare.
Other than the ones mentioned beforehand, this form also showcase other data like company name, address, zipcode, the taxes withheld from Medicare, federal income and Social Security, received tips and compensation received, dependents’ benefits and nonqualified plans.
Well, employees should not worry if they are issued W-2 even if they are paid less than what is required because it is easier for companies to keep these records. The truth is, companies are mandated to complete and to keep six W-2 tax forms for every worker. This is indeed lots of paperwork for them, right? The truth is, employees can receive the W-2 tax forms, either electronically or manually.
Are W-2 Tax Forms Needed in Tax Filing?
The answer is yes, all workers need these forms in filing their taxes. All employees cannot file their taxes with their last pay stubs without completing their W-2 tax forms. Employees issue W-2 tax forms to their workers yearly, every January 31. Should you have concerns about these forms, don’t hesitate to approach your employer for information and guidance.