The information on W-2 is extremely important when preparing tax return. The employer needs to provide a W-2 to the employees before January 31 following the close of the tax year (December 31). W-2 tax form shows the amount of taxes withheld from a paycheck for the year. It is used to file people’s federal and state taxes.
When an employer withholds an amount from an employee’s paycheck for federal income taxes, those amounts are remitted to the IRS throughout the year. The employee might not realize it, but in most cases, they cannot wait until April 15 to pay the entire tax bill. The IRS needs all to make periodic payments throughout the year which the employer takes care of.
When preparing the federal return and calculating tax for the year, the employee must subtract the withholding amount from the tax bill. This calculation states the right amount of refund that can be expected by the employee or if any additional tax payment is required. when one files a state income tax return, the same calculation is necessary for the amount withheld to pay the state income taxes.
On Form W-2, which you can get from Turbotax W2 finder, the IRS needs the employers to report wage and salary information for employees. Form W-2 reports the amount of federal, state and other taxes withheld from a paycheck.
The W-2 form is divided into boxes reporting various items relating to an employee’s income. Box 1 of the W-2 has the annual wage while Box 2 has salary payments with the amount of federal tax withheld from the annual wage. Box 3 is the paid Social Security tax. Other boxes include wages subject to Medicare tax, Social Security taxes that are withheld and information on the state income tax withholding.