If you’re a wage earning taxpayer, chances are that you’re already familiar with Form W-2. For paid employees (ie, most taxpayers) the W-2 is among the most crucial of tax documents.
Form W-2 is an information return document, on which employers report an employee’s total wages paid, and taxes paid on those wages. The form is also used to report Federal Insurance Contributions Act (FICA) taxes to the Social Security Administration.
Employers are required by law to complete a Form W-2 for every employee to whom they pay a salary, wage, or other compensation. (This category of workers excludes contractors, whose total earnings are reported via a Form 1099.)
Employers are also required by law to provide their workers with their W-2 forms prior to January 31 of the calendar year. Form W-2 comes with 6 copies, some furnished to the wage-earning taxpayer and some sent to various taxing authorities. The copies are as follows:
- Copy A – This copy is sent by the employer to the Social Security Administration. (Side note: employers must also provide for the SSA Form W-3, a summary of all Forms W-2 completed, along with all Copies A submitted.)
- Copy B – This copy is sent to the employee, who then files it with their federal income tax returns.
- Copy C – This copy is sent to the employee. Copy C is yours to keep for your records.
- Copy D – Employers retain this copy for their records.
- Copy 1 – This copy is submitted by your employer to your state or local taxing authority, if required by law. Some state and local taxing authorities do not require a copy.
- Copy 2 – If you have any state or local income taxes to be filed, this is the copy you’ll need to provide when paying those taxes.
For most wage and salary earners, Form W-2 is the only document to report income. If you’ve held only one job throughout the tax year, your entire income will be on a single Form W-2. If you’ve switched jobs, your earlier employer is still required to provide a W-2 for wages you earned during the year. If you do any contract work on the side, your income will also involve one or more Forms 1099.
So to recap, you should receive copies of Form W-2 sometime prior to January 31. Should you not receive your W-2, contact the IRS after February 15th and they can help in the retrieval process.
It’s a good idea to take your receipt of these forms as an impetus to begin preparations to file your taxes. You’ll want to gather any and all documents you’ll need to claim deductions. (See our article on Schedule A for more on what you may be able to deduct.)
If you use an electronic service to file your taxes, chances are you won’t have to send hard copies to state or federal authorities. Nonetheless, it’s always good to hang on to those extra copies. In the rare event of an audit, or an error in your return, it’s great to have a paper trail.