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Understanding Your W2

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If your New Year’s resolution had anything to do with procrastination, budgeting or organization, then you’ll be happy to know that you should have a document that will help. Your W-2 Wage and Tax Statement is probably the easiest and most helpful tax document you’ll receive. This form is easy to navigate — consider it your cheat sheet for filing your taxes.

What is a W-2?

The W-2 Wage and Tax Statement (or simply “W-2”) is an important document used mainly for tax purposes. It shows how much money you made and how much you paid in taxes in a calendar year.

Who gets a W-2?

If you’ve had any taxes withheld from your paychecks in the last calendar year, you will receive a W-2 from every employer from that year. You should receive three or four copies of your W-2:

  • Copy B — File with your federal income tax return.
  • Copy C — Keep for your records (the IRS recommends up to seven years).
  • Copy 1 — File with your state income tax return.
  • Copy 2 — File with your local income tax return.

When do I get my W-2?

Your employer is required by the IRS to provide your W-2 in a timely manner. If you haven’t received your W-2 by February 15, talk to your employer or contact the IRS for assistance.

As soon as you receive your W-2, verify that your employer got all the information correct. Are your name, address and Social Security number accurate? Does your income on your W-2 match the income on your end-of-the-year pay stub?

If any of the information is incorrect, there are instructions on the back of your W-2 for making corrections. Ask your employer to file a Form W-2c for corrections. Need more help? Call the IRS at 1-800-829-1040.

Using the W-2

If you stress about filing taxes when April rolls around, or it’s your first year filing, get started now. Set a personal date for filing your taxes (maybe March 15), allowing plenty of time to seek help if you need it. Call the IRS for individual tax questions, or visit irs.gov/localcontacts for some face-to-face help at a local branch. For the computer savvy, the IRS has an online filing system. Visit irs.gov and check out e-file or Free File options.

Breaking Down the Boxes

  • Box 1 — Your income (how much you earned).
  • Box 2 — How much federal income tax you paid.
  • Box 3 — How much of your income was taxable for Social Security.
  • Box 4 — How much Social Security tax you paid.
  • Box 5 — How much of your income was taxable for Medicare.
  • Box 6 — How much Medicare tax you paid.

NOTE: Box 3 and 5 may be different from Box 1 if you had any deductions (money withheld from your paycheck) that are not taxable. The most common non-taxable deductions are health benefits and retirement contributions.

  • Box A — Your Social Security number.
  • Box B — A crazy number that the IRS has attached to your employer.
  • Box C — Your employer’s name and address (most often the corporate headquarters).
  • Box D — Don’t worry about this one (it’s official mumbo-jumbo).
  • Box E/F — Your name and address.

Don’t be intimidated by the W-2 — it’s simple and easy to use.

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