Up next in 10
How To Use Form W2 for Federal and State Income Tax Returns | Tax Info from IRS.com
93K views
Mar 19, 2024
One of the most important documents for filing your federal income taxes is the Wage and Tax Statement Form, also known as IRS Form W-2. It’s the bread and butter of most taxpayer’s federal returns. Because, like most taxpayers, you earn your living from an employer. This video covers everything you need to know about your Form W2 when it comes to filing federal and state income taxes, including what it is, when it's due, how to use it, how to replace a lost W2, and how to get a copy of a past form W2. ------------------------------------- Tax Advice for Real People We provide practical easy to understand tax advice, prepared by leading tax experts in the USA. ------------------------------------- Resources: Form W2 Instructions https://www.irs.com/en/tax-form-w2-instructions/ Get a copy of your W2 https://www.irs.com/en/how-to-get-a-copy-of-your-w-2-form/ IRS Form 4852 https://www.irs.gov/forms-pubs/about-form-4852 ------------------------------------- Contents of this Video: 00:00 - [ Intro: What is a W2? ] 00:49 - [ Who must file a W2? ] 01:30 - [ When are W2 forms due? ]
View Video Transcript
0:00
Nick Scharver on IRS.com. Today we're going to talk tax 101 and W-2s. So what
0:06
exactly is a W-2? A W-2 is a wage and tax statement. Now that tax form W-2 is a
0:14
document that employers are required to send employees and the IRS. It contains
0:21
your wage and salary information as well as the taxes withheld from your paychecks
0:26
for Social Security related reasons. These withholding taxes are sent directly to the IRS by your employer and they act like a credit towards the
0:36
income taxes that you must pay for the year. The W-2 form also reports the
0:42
Social Security tax aka FICA to the Social Security Administration. Now who
0:49
must file a W-2? Employers are actually required to file the W-2 for each
0:56
employee. They must report the wages that are paid to each employee to the IRS and
1:02
Social Security Administration. Now the employees will use the W-2 form that
1:07
they receive from the employer to prepare and file their 1040 and their
1:13
income tax. So taking a look at this form this is what the employer will file
1:19
and this is pretty common what your employee will receive and use to prepare
1:27
and file their tax return. When are the W-2 forms due? Remember the W-2 tax form
1:33
is a responsibility of the employer. You as an employee just get a paper copy
1:39
Providing you with an up-to-date W-2 is the employer's obligation and it's
1:45
usually something the payroll provider or the team in charge of financial
1:49
records at the company you work for would do. Employers are required to
1:55
complete this form for each of their employees and they must deliver it to
1:59
each employee by January 31st of the calendar year. W-2 forms will report all
2:07
the wages and taxes of the employees of that business for the prior calendar
2:12
year. Now what does the W-2 form tell us? It provides all that important
2:19
information that you use to file your personal tax return. It's going to report
2:24
your total wages. It's going to report any tips that you received. It's going to
2:31
report any contributions to retirement plans. It's going to report any contributions to a health savings account. It's also going to report, and
2:43
this is important, the federal, state, and local taxes that your employer withheld
2:49
that you paid throughout the year to the IRS. So let's do a deeper dive into this
2:57
W-2 tax form. Boxes A through F cover employer and employee identification
3:04
information. Box 1 is going to show the total taxable compensation that an
3:10
employee was paid at throughout the year. This includes wages, tips, bonuses, and
3:16
life insurance benefits. So box 1 is the total amount of compensation that you
3:22
received from your employer. Box 2 shows us the income taxes withheld from the
3:28
employee's paycheck throughout the year. Now remember these taxes that were taken out of your paycheck work as a credit towards paid income taxes when
3:40
filling out your 1040. You as an employee dictate how much is withheld from that
3:45
paycheck and how much ends up being withheld throughout the year when you
3:51
complete your W-4 form, typically on the onboarding process when you first are
3:56
hired with your employer. You are allowed to change your W-4 and your
4:01
withholdings throughout the year. Now boxes 3 through 6. Box 3 and 5 show the
4:07
amount of wages that are subject to Social Security and Medicare taxes. These
4:13
figures may be different from the total taxable compensation listed in box 1
4:18
And box 4 and 6 show how much money was withheld for each specific tax. Boxes 7
4:27
and 8 show the amount of tip money an employee has reported to an employer
4:31
Box 8 specifically shows any additional tip income the employer has allocated to
4:37
an employee that was not reported in box 7. Now box 9, it's grayed out. Why? It's no
4:45
longer necessary and instead of the IRS creating a completely new form, they have
4:50
just grayed it out. It's irrelevant. Box 10 reports the total amount of
4:57
dependent care expenses and services, daycare facilities, that were paid for or
5:03
provided by the employer. Box 11 is any amount of deferred compensation from an
5:10
employer's non-qualified plan or non-governmental pension plan such as a 401k, etc. Box 12 shows any other types of compensations or reductions to an
5:23
employee's taxable income. This includes things like contributions to a 401k. Each
5:29
item will have a code composed of a letter followed by a number. Box 13
5:34
contains three check boxes. An employer will check these boxes if number one, an
5:40
employer worked as a statutory employee not subject to federal tax withholding
5:45
Number two, the employee participated in an employer-sponsored retirement plan like a 401k. Or three, the employee received sick pay through a third party
5:57
like an insurance policy. Box 14 gives an employer space to collude any other tax
6:03
information that did not fit into the other boxes. That's all it's there for
6:08
Box 15 is the employer's state tax identification number. And box 16 through
6:15
20 reports the employees total taxable income at the state and local levels as
6:20
well as the amount of taxes withheld for each of those governments. Now why do you
6:26
need a W-2? Well if you're an employee you need a W-2 in order to file an
6:30
accurate income tax return, form 1040 with the IRS. When preparing your annual
6:35
return you're going to use form W-2 to report earnings and taxes withheld from
6:41
that income. If you had more than one employer during the year you're going to
6:45
use multiple W-2s to complete your taxes. What if you lost your W-2? How do
6:50
you replace it? Well number one, don't panic. You're going to start by contacting
6:54
your employer. They should have a copy of your W-2 form. The HR departments usually
6:59
take care of this type of paperwork. They can mail it to you or they can even
7:03
email it to you. Just make sure they have your updated mailing address if you
7:07
elect to mail as that's the number one reason W-2s get lost. If you can't
7:12
contact your employer you can attempt to contact the payroll processing company
7:17
if they utilize one such as ADP or Paylocity and see if you can't just log
7:22
in and download your W-2 directly from them or just give them a call. But your
7:28
third option is going to be to contact the IRS. Though it's frustrating you do
7:33
have some options there. So if you don't get a response from your employer by
7:37
say February 14th you can call the IRS support line and you know they can reach
7:43
out to your employer on your behalf. This may help them you know get motivated to
7:48
respond but you'll need to provide the IRS some basic information when you give
7:53
them a call. If you've exhausted all those options and you still can't
7:57
receive your W-2 there is a form 4852 which stands for substitute for form W-2
8:03
You'll need to estimate your income and federal taxes withheld as close to
8:08
accurately as you can and keeping in mind that there might be a delay in the
8:13
filing of your tax return and subsequent tax refund as the IRS works to verify
8:18
your estimations. What do we do when we need a W-2 from prior year and maybe the
8:26
employers out of business and you actually need a copy of that W-2? Well
8:30
you have one of two choices. You can request a copy of your tax return form
8:37
4506 and with it you will get paper copies and the W-2 that you sent in with
8:45
your return will come in that copy form paper form. Please note the processing
8:51
time is about 90 days and you're typically looking at a fee of around
8:57
$50 to get a paper copy of that tax return for that year which would include
9:01
any subsequent forms you filed with it including the W-2. A faster way if you
9:07
need the information that was reported against you, the income information, you
9:12
can request what's called your wage and income transcript from the IRS and you
9:16
can do that online and that's the recommendation if you're just looking
9:20
for accurate information that you can't find on your tax return for that
9:25
specific year for some reason
#Finance
#Financial Planning & Management
#Tax Preparation & Planning