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Understanding Your W-2 Form

Understanding Your W-2 Form

Tax season can be a headache, but it doesn't have to be! We’re here to help make filing your taxes easier by giving you a better understanding of your Form W-2.

Form W-2 helps the IRS determine how much income employees should be claiming, confirms what they have already paid in taxes and need to pay in taxes (if any). Form W-2 is a necessary component for tax returns and tax filing.

Your W-2 is essential to filing your taxes. Employers must send out W-2s by January 31, or a few days later if the end of the month is on a weekend. Contact your employer if you haven’t received your W-2 by mid-February.

What is Form W-2?

Form W-2 is the annual statement provided by your employer that reports your taxable income to you and the IRS. The form shows you and your employer's payments for Medicare and Social Security and taxes withheld from your pay.

All of the taxes withheld from your pay are on Form W-2. Information on Form W-2 goes to state and federal taxing authorities and helps determine how much you should be paying in taxes for the given year.

Reading Form W-2

Form W-2 has multiple boxes explaining different aspects of your earnings and withholdings. Below is a short explanation of every box on Copy B of the W-2, which is the one you will file with your tax return:

Boxes A - F:

  • Your Social Security number
  • Employer identification number (EIN)
  • Your employer's name, address, ZIP code
  • Your name, address, and ZIP code

Box 1: The total taxable income and other taxable compensation paid to you by the employer in the last tax year.

Box 2: The amount of federal income tax withheld from your pay.

Box 3: The total amount that is subject to Social Security tax .

Box 4: The Social Security tax withheld on income reported to your employer.

Box 5: The total pay (including tips) is subject to Medicare tax.

Box 6: The amount of Medicare tax withheld. Each employee and employer pay 1.45% of the total 2.9% tax rate. In addition, anyone earning $200,000 a year or higher will pay an additional 0.9%, which is the employee's responsibility.

Box 7: Tips reported to your employer.

Box 8: Employer reports tips allocated to you.

Box 9: This box will always be empty. It’s from an outdated perk no longer used.

Box 10: The amount of money provided for dependent care.

Box 11: The deferred compensation you received from your employer in a non-qualified plan.

Box 12: All of the codes your employer needs to report to the IRS:

  • Reimbursements for moving expenses members of the armed forces
  • Non-taxable sick pay
  • Employer-provided adoption benefits

Box 13: These options are not subject to federal income tax withholding. The checkboxes include:

  • Statutory employee – or independent contractors treated as employees
  • Retirement plan
  • Third-party sick pay

Box 14: A miscellaneous field. This field could include:

  • Non-taxable income
  • Uniform payments
  • Union dues
  • Health insurance premiums

Boxes 15 to 20: These boxes contain local and state income tax information from your employer. The boxes include:

  • Employer's state ID number
  • State wages, tips, or commission
  • State income tax
  • Local wages, tips, or commission
  • Local income tax
  • Locality name.

You will also need to attach Copy 1 to any other tax returns you're required to submit (including state, city, or local).

Now that you know more about your W-2, we hope you’re more prepared when filing your taxes. To sweeten the deal even more, Horizon members get a $15 discount at TurboTax when you file this year! All you have to do is log into online banking and click through to TurboTax and save when you file!