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How to Read and Understand W-2 Like a Professional

Are you familiar of the W-2 tax form? Should you find this article interesting, then you are advised to continue perusing this article to get more information about this form and its significance to taxpayers.

With the deadline for filing of taxes nearing, it is normal to see myriad men and women 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. If you are the one preparing the tax returns or you hire professional tax service providers to do you for you, then W-2 form is among the numerous forms that you need to understand and to complete. Always remember the significance of reading and understanding all the stipulations found in these forms and its impact to taxpayers.

What Is the Wage and Statement Tax Form?

When we talk of W-2 form, we refer to one kind of tax form from the Internal Revenue Service that is issued by companies to their employees. Well, business enterprises have specific withholding reporting as well as insurance requirements for their employees which are different from independent contractors. These forms showcased not the respective positions and work hours of workers but their total salaries. In the United States, companies are obliged to issue W-2 form to employees who are paid at least six hundred dollars, whether in taxable benefits, cash or its equivalent. They should also issue W-2 to employees for their withholding taxes, including their Medicare and Social Security.

Other than the ones mentioned beforehand, this form also showcase other data like company name, address, zipcode, the taxes withheld from Medicare, federal income and Social Security, received tips and compensation received, dependents’ benefits and nonqualified plans.

If you are among those who earn less than $600 and yet you are given W-2 form, don’t worry because it is already routinary and easier for these companies to keep these file these records. These companies prepare six W-2 of these forms every worker. This is indeed lots of paperwork for them, right? The truth is, employees can receive the W-2 tax forms, either electronically or manually.

Are W-2 Tax Forms Needed in Tax Filing?

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.

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