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Published: August 1, 2023

W-2 Form: Who Uses It? Everything You Need to Know

Uncover the ins and outs of the W-2 Form in tax reporting. Learn about its key components, how to avoid submission errors and penalties and ways of accessing it.
form w2 IRS overview

Key Takeaways

  • The W-2 Form is an important financial document at the heart of tax reporting in the United States, equipping both taxpayers and businesses with everything they need for accurate financial reporting.
  • Failure to accurately complete the document and comply with the IRS submission deadlines can result in penalties and create workforce disruption.
  • It can be accessed through multiple channels, including digital avenues such as email, employee portals, payroll providers, or traditionally through physical distribution.

Every year taxpayers nationwide prepare for the customary practice of income tax reporting. Along with the mountain of complex documentation employees and employers must navigate, one integral document is at the heart of annual income disclosure – the W-2 Form.

The document lays the foundation for tax reporting and financial integrity, by equipping taxpayers and employers with an extensive breakdown of annual income, including withheld taxes, and other critical financial information to assist with accurate financial reporting.

Let’s explore the intricacies and powerful impact of the documnet Form on your financial well-being, let’s delve into the intricacies

What is a W-2 Form? Everything You Need to Know

The W-2 Form (the Wage and Tax Statement), is an important financial document used in the United States to report on tax. It acts as a comprehensive summary of an employee’s annual income, including tax withholdings and is used to provide the employee and the Internal Revenue Service (IRS) with essential financial information for accurate income tax reporting.

Who Issues and Receives It?

  • Employers are responsible for issuing it and are required by law to provide the document to every employee (full-time, part-time, seasonal and temporary)) that received a salary, wages, or any other form of compensation during the financial tax year. 
  • Employees are the recipients of the W-2 form and it is a critical document allowing them to accurately report on their earnings during the financial tax year, and calculate the amount of tax owed or due for refund.

7 Pieces of Key Information Included in the W-2 Form

The W-2 form provides employees and employers with important financial information required for annual tax reporting and provides a full disclosure of an employee’s annual earnings and tax withholdings. Let’s dive into the 7 key pieces of information included:

  1. Employee Information: Which includes the employee’s name, address, and Social Security number.
  2. Employer Information: The W-2 Form provides details about the employer, including the company’s name, address, and employer identification number (EIN).
  3. Wage Information: The form discloses the total annual value of taxable wages earned by the employee, which includes the following compensation types: wages, tips, bonuses, commissions, and other forms of compensation.
  4. Federal Income Tax withheld: The document discloses the full amount of federal income tax withheld from the employee’s wages during the course of the year.
  5. State and Local Income tax withheld: If applicable, the form also includes information on state and local income taxes withheld.
  6. Social Security and Medicare Taxes: This information communicates the total value withheld for Social Security and Medicare (FICA taxes).
  7. Other Compensation and Benefits: It also reports on retirement plans, health insurance premiums, and other contributions or benefits made by the employee or the employer on behalf of the employee.
A person filling in a w2 form during the US federal tax season

3 Way to Access your W-2 Form Online

In an increasingly digital era, accessing the document has never been more convenient and many are embracing digital platforms to provide online access to the file. Here are three ways you can access it digitally:

  1. Via an employee portal: Some employers allow employees to access their file through an employee platform. Employees would need to log into their profile using their personal credentials and navigate to the tax section of the platform to access the form. 
  2. Via payroll provider websites: In some instances, employers use third-party payroll providers. Employees can visit the payroll provider’s website and log in with their account details to access and download it.
  3. Via email: Some employers prefer to send employees their form via email. Employers that opt for this method will send a direct email to employees with download instructions to access the W-2 form. Employees should check their mails regularly and keep an eye out for spam! 

Retrieving a Physical Copy From Your Employer

There may be instances where a digital copy is not available and employees will need to obtain physical or paper copies directly from their employer. Here are three ways to access a physical copy:

  1. Contact your internal HR department or payroll provider: Employees can reach out directly to the HR department within their organisation, who will be able to provide guidance on how to collect the W-2 Form. It is also possible to contact the payroll providers to request a copy.
  2. Arrange for in-person collection: Some employers may off offer in-person collection, allowing employees to collect their W-2 form directly from their employer by scheduling in-office collection appointments. 
  3. Request a mailed copy: forms may also be made available via direct mail, with employers distributing the forms to employees by mailing it directly to a physical address. To ensure the document is received at the correct address, it is important to ensure employers have the address on file.

What to Do if You Haven’t Received Your W-2 Form

In some instances, your document may get delayed or misplaced. If it doesn’t arrive, here are 4 simply steps you can follow to successfully access it:

  1. Authenticate your address: Ensure that your employer has the correct mailing address circumvent any potential issues with delivery.
  2. Reach out to your employer: Employees can enquire about the status of their form by reaching out directly to the HR department of payroll provider.
  3. Request for a W-2 form reissue: If you do not receive it, request a reissue. Your employer can provide you with a duplicate copy.
  4. Reach out to the IRS: If accessing your file is unsuccessful via these methods, employees will need to reach out to the IRS directly to request a re-issue. The IRS will also be able to provide guidance on the information required to submit taxes compliantly.

Understanding the Key Components: Box-by-Box Breakdown

Although the W-2 Form may initially appear daunting with the intricate web of boxes and sections requiring completion, there’s no need to worry- here is a breakdown of each component to help you seamlessly navigate this critical document.

  • (Box 1-9) Wage and Salary data: Boxes 1-8 provide an exhaustive breakdown of the employee’s earnings over the course of the tax year. Each box reports on a different wage type such as regular wages (Box 1), tips (Box 7), and bonuses (Box 3). Medical wages and social security are reported in Boxes 3 and 5 and may be different from the taxpayer’s total compensation as a result of pre-tax deductions or special exemptions.
  • (Box 10-14) Tax Withholdings and Deductions: Tax withholdings and deductions are intricately covered in Boxes 10 to 14. Information regarding federal income tax withheld (Box 2), Social Security tax withheld (Box 4), and Medicare tax withheld (Box 6) is covered in this section. Deductions including retirement plan contributions and pre-tax benefits, which can significantly impact the value of taxable income, are indicated in Boxes 11-14.

5 Common Errors to Avoid

Given the important role the W-2 Form plays in tax reporting, the accuracy of the information contained within the document is critical. By understanding each section in more depth, submitting an accurate document to the IRS becomes a seamless process. Here are some common pitfalls to avoid:

  1. Look out for incorrect employee information: Cross-check all employee information including, name, address, and Social Security Number, to prevent errors in taxpayer identification.
  2. Watch for inaccurate wage reporting: Review wage and salary information meticulously to ensure all earnings are accurately recorded in the appropriate boxes.
  3. Verify tax withholdings information: Prevent mismatched tax withholdings, by verifying that tax withholdings information outlined in Boxes 2, 4, and 6 align with the values withheld from employee paychecks over the course of the tax year.
  4. Ensure proper worker classification: Worker misclassification can lead to tax implications. which is why it is important to ensure proper classification of workers either as employees or independent contractors to prevent complications with tax submission.
  5. Don’t overlook deductions: Employees can take advantage of tax savings by taking maximising on all relevant deductions and benefits available to them.

How to Complete the W-2 Form: A Step-by-Step Guide

While there are a myriad of boxes and sections to complete, filling out the W-2 Form doesn’t have to be a daunting task. To ensure an accurate and timely submission of this critical tax document, follow this simple 6-step guide:

  1. Gather employee information: Start by collecting accurate details of the employee, including their full name, address, and Social Security number (SSN). Verify this information for accuracy before proceeding.
  2. Record employer information: Enter the employer’s legal name, address, and employer identification number (EIN) in the designated boxes.
  3. Document social security and medicare wages: Enter the Social Security wages (Box 3) and Medicare wages (Box 5), which may differ from the total wages due to certain pre-tax deductions.
  4. Document wage and salary Information: In Boxes 1 to 9, report the employee’s total earnings for the tax year, including wages, tips, bonuses, and other compensation. Ensure proper classification of different types of income.
  5. Report on tax withholdings: In Box 2, record the total value of federal income tax withheld from the employee’s wages over the annual tax year. Be sure to also include Social Security tax withheld in Box 4 and Medicare tax withheld in Box 6.
  6. Document additional deductions: Where relevant, document any additional deductions in Boxes 11 to 14, including contributions to retirement plans or any pre-tax benefits.

How to Report on Different Types of Income and Deduction

Errors in tax reporting are likely to arise when different forms of income and deduction types are inaccurately documented. Accurate reporting on different income types is critical to ensure a legitimate submission. Here’s how to handle different types of income and deductions:

  1. Employee Tips: If your employees receive tips, ensure they report them accurately in Box 7. Remind employees to keep a daily record of their tips to facilitate accurate reporting.
  2. Employee Bonuses: Include any bonuses or commissions in Box 3 to report on supplemental wage payments separately.
  3. Retirement Contributions: Report contributions to qualified retirement plans in Box 12 with the appropriate code.
  4. Health Savings Account (HSA) Contributions: Report HSA contributions in Box 12 using the corresponding code.

4 Tips for Ensuring Compliance and Accuracy

Incorrect submission can compromise the integrity of the tax submission, To ensure compliance and accuracy, consider the following 4 tips:

  1. Use the correct version: W-2 Forms are updated from time to time which is why it is essential to validate that the document being used is from the current tax year, to ensure submissions are accurate.
  2. Verify all information: Before submission to the IRS, verify that all the data contained within the document is accurate and up to date.
  3. File the submission on time: Late submission of the W-2 Form can result in penalties. To ensure a timely submission, employers must ensure that copies are submitted to the Social Security Administration (SSA) on time and that documentation is made available to employees timeously to avoid late reporting.
  4. Request professional guidance: Completing it can be a complex undertaking. Seeking out the guidance of tax specialists can simplify the process and assist you in submitting the most accurate tax report.

Tax Reporting Deadlines all Employers and Employees Should Know

To ensure tax reporting is valid and accurate and to prevent any unwarranted penalties or workforce disruption, it is critical to meet the stipulated tax submission timelines as documented by the IRS. Employers need to ensure that the correct documentation is made available to their employees and employees need to ensure that they file their tax report in line with IRS submission dates. Here’s what you need to know:

1. Tax submission deadlines for employers

Employers need to ensure that all employees (including current and former employees who received wages within the tax year) have access to the W-2 Form by the 31st of January for the previous tax year. Failure to make the document available by this date will result in late submissions on the part of employees who will not have adequate time to prepare their individual tax reports, leading to unwanted penalties.

2. Tax submission deadlines for employees

As an employee, understanding the deadlines for filing your W-2 Form with the IRS is essential for avoiding penalties and ensuring compliance. There are two ways for employees to file it. Here’s what you need to know:

  1. Filing the W-2 Form on paper: Employees who choose to file theirfForm on paper, must ensure it is submitted to the IRS by the 15th of March and that is successfully reaches the required IRS office on time to meet this deadline.
  2. Filing the W-2 Form electronically: Electronic filling provides a more streamlined and efficient way to report on federal income tax. Employees that choose to file electronically must ensure submissions reach the IRS by the 30th of April.

How Playroll can help simplify the Process of Federal Income Tax

  1. Avoid employee misclassification mishaps. Playroll supports compliant hiring by ensuring your workforce is accurately classified as either employees or independent contractors in over 180+ countries globally.
  2. Cut down the time spent on Payroll, with Playroll you can hire, pay, and manage your global workforce in one place; we’ll handle the hard stuff like tax deductions, pensions, local currencies, benefits and government fees.
  3. Real humans providing human centric support and a 99.9% uptime guarantee. All Playroll customers are provided dedicated customer success managers with 24/7 support – we put our money where our mouth is. We are a customer centric platform, meaning your employees and their issues are our primary objective, ensuring employee issue resolution within hours not days.

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W-2 Form FAQs

What steps do I take to obtain the W-2 Form?

o access your W-2 Form, use your credentials to log in to your employer’s portal or self-service platform. If online access isn’t available, contact your employer’s payroll or HR department to request a physical copy or explore alternative methods. Additionally, verify that your mailing address is up to date to avoid any delivery problems, as some employers send W-2s by mail.

What I do If There are Discrepancies in my W-2 Form?

To address any W-2 form discrepancies, first, contact your employer’s payroll or HR department to discuss the issues and request a corrected form if needed. If errors are confirmed after filing your taxes, you might have to submit an amended tax return (Form 1040X) with the accurate information.

How can I generate a printout of my W-2 Form?

Access your employer’s online platform and find the W-2 Form in the tax section. Download the form as a PDF and print it using a connected printer. If you need help or don’t have online access, reach out to your employer’s HR or payroll department for assistance.

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