IRS Form W-2, formally called the “Wage and Tax Statement,” details how much an employer paid you and how much withholding tax was deducted from your pay.
- The IRS requires employers to report wage and salary information. Employers do that via Form W-2.
- Don’t confuse a W-2 with a W-4 — that’s the form you use to tell your employer how much tax to withhold from your paycheck every pay period. And notice the key word here: employer. Freelancers or contract workers get 1099s from their clients, not W-2s.
- Employers must send employees a W-2 by the end of January each year.
- Every employer that paid you at least $600 during the year has to send you a W-2. Tip income may be on it.
- For any people, the information on your W-2 determines whether they’re getting a refund or writing a check come April. Here are six things you need to know about how to handle it.
1. You need your W-2 to do your taxes
- Your W-2 tells you how much you earned from your employer in the past year and how much withholding tax you’ve already paid on those earnings.
- When you do your taxes, you’ll need the W-2 to fill in a lot of the information.
2. It shows more than just your pay
Your W-2 also details how much you contributed to your retirement plan during the year, how much your employer paid for your health insurance, or even the amount you’ve received in dependent care benefits. All of that data affects your tax picture — your retirement contributions might not be taxable, for example.
3. It’s not a secret
- Employers are legally required to send copies of your W-2 to the Social Security Administration and IRS (“Copy A”) and your state and local tax authorities (“Copy 1”).
- You won’t get away with anything if you just shove your W-2 in a drawer and decide not to put the information on your tax return. In fact, you’ll probably get a terse letter and a few months’ worth of headaches from the IRS — and the state, if your state has income taxes — after they compare your return to the information your employer sent to the government.
4. Your employer has to send you one by the end of January
- The IRS requires employers to furnish W-2s to the government and employees by Jan. 31 or face penalties.
- The IRS defines furnish as “get it in the mail,” which means you should have yours in hand by the first week of February.
- Employers can also send employees their W-2s electronically, but it’s not required.
- Even if you quit your job months ago, your ex-employer can still wait until Jan. 31 to send you a W-2 — unless you ask for it earlier, in which case the employer has 30 days to provide it.
- Interesting note: If you die, you’ll still get a W-2 that year.
5. Your employer might make an error
- If your employer leaves out a decimal point, gets your name or a dollar amount wrong, or checks the wrong box — it happens — point out the mistake and ask for a corrected W-2.
- Pointing out the mistake and waiting for a new W-2 will cost you time, but here’s something that could make you feel better: The IRS might fine your employer if the error involves a dollar amount or “a significant item” in your address.
6. The correct address is really important
- If your W-2 doesn’t show up by Valentine’s Day, first ask your employer for a copy and make sure it’s got the right address.
- If that doesn’t fix things, call the IRS (1-800-829-1040). You’ll need to provide information about when you worked and an estimate of what you were paid.
- Remember that your tax return is still due in April, so you might need to estimate your earnings and withholdings to get it done on time. (Go here to learn more about getting an extension.) Plus, the IRS might delay processing your return — read: refund — while it tries to verify your information.
- If your W-2 finally shows up after you already filed your tax return, you might need to go back and amend your tax return.