How to Read and Understand W-2 Like a Professional
Do you have trouble in understanding as well as reading the W-2 form? If you are confused about it, then you should continue reading this article to get some ideas and information on this particular form.
With the deadline for tax filing just around the corner, there are numerous taxpayers who are prepping and cramming to have it done timely. However, there are also some who have trouble in understanding certain tax forms like W-2. Should you be among the numerous employees out there, then W-2 is one of the tax forms that you need to prepare and to comply. Should you are self-preparing the tax return or have someone prepare it for you, then don’t forget that there W-2 tax form is among the many forms that you need to read, to understand and to comply. Keep in mind that you need to understand all the contents of these tax forms and its effects to taxpayers.
What Is the Wage and Statement Tax Form?
Actually, this is one type of IRS tax form issued by business enterprises to their workers. Companies have particular insurance, withholding and reporting requirements for their workers which are somewhat different from that of independent contractors. These forms showcased not the respective positions and work hours of workers but their total salaries. In the United States of America, companies are ordered to issue their employees W-2 forms if they pay them at least six hundred bucks, in taxable benefits, cash or its corresponding equivalents. It holds true for taxes withheld, including Medicare and Social Security.
These forms come in table forms that showcases other information aside from the ones detailed above like company name, department where the employee belongs, address, tax withheld from Medicare, Social Security and Federal income, tips and other compensation, benefits of dependents and nonqualified plans.
Well, employees should not worry if they are issued W-2 even if they are paid less than what is required because it is easier for companies to keep these records. The truth is, companies are mandated to complete and to keep six W-2 tax forms for every worker. It is definitely require lots of paperwork for companies. The truth is, employees can receive the W-2 tax forms, either electronically or manually.
Are These Forms Needed in Filing Taxes?
Definitely, they need these W-2 forms in filing taxes. You cant file taxes without these W-2 tax forms, even if you have the last day pay stub. Usually, companies issued these forms to their employees every 31st of January yearly. If ever you have questions about something in these forms, then be sure to inquire from your employers.