W-2

What's on a W-2

Major boxes:

• Box 1 — total taxable wages.
• Box 2 — federal income tax withheld.
• Box 3-6 — Social Security and Medicare wages and taxes.
• Box 12 — various coded items (401(k), HSA, etc.).
• Boxes 15-20 — state and local tax info.
• Personal info — employee SSN, employer EIN, addresses.

The W-2 documents what was paid and what was withheld.

When you get one

Standard timing:

• Employers must send W-2 by January 31 for prior year.
• Multiple employers — receive W-2 from each.
• Available by mail and often online.
• Used to file federal and state tax returns.

Missing W-2s can be requested from employer or recreated by IRS.

W-2 vs. 1099

Key distinction:

• W-2 — employee; tax withheld; employer pays half FICA.
• 1099 — independent contractor; no withholding; recipient pays self-employment tax (both halves of FICA).

The classification affects taxes substantially. Misclassification is common.

Why withholding matters

Several effects:

• Pay-as-you-go — taxes withheld throughout year.
• Refund or owe — depends on whether withholding matched actual tax liability.
• W-4 controls withholding — adjust to optimize.
• Underwithholding penalty — if too little withheld.

Most people aim for small refund or small balance owed.

Common W-2 issues

Frequent problems:

• Box 1 vs. Box 3 mismatch — pre-tax deductions reduce Box 1 but not always Box 3.
• Multiple states — for moves or remote work.
• Box 12 codes — confusion about what each represents.
• Errors — incorrect employer reporting requires correction.

Review W-2 carefully when received.

Beyond the W-2

Additional considerations:

• Combine all W-2s if multiple employers.
• Plus 1099s for non-employee income.
• Plus investment income documents.
• Plus deductions/credits for full picture.

W-2 is one input to tax return, not the whole picture.

What individuals should know

For all employees:

• Verify W-2 accuracy — errors are correctable.
• Save W-2s — needed for tax filing and sometimes for loans, rentals, etc.
• W-4 adjustments can change withholding mid-year.
• Compare to pay stubs if anything looks wrong.

For tax filing:

• Box 1 wages plus other income forms taxable income.
• Box 2 withholding counts toward total tax already paid.
• Don't lose original — replacement may take time.

The W-2 is the foundational US tax document for employees. Understanding the boxes and how they affect tax filing helps ensure accuracy and identify errors early.