Understanding the W2 Form
If you are a salaried employee in the United States, then you might have come across the W2 form. It is an essential tax form that your employer must give you by January 31st each year. The W2 form reports your total income earned and taxes withheld throughout the previous year, which you need to file your taxes accurately. Filling out a W2 form can be daunting, but it’s crucial to avoid errors and penalties. In this article, we will walk you through the process of filling out a W2 form comprehensively.
What Information Do You Need to Fill Out a W2 Form?
Before starting, it’s crucial to gather all necessary information to fill out the W2 form accurately. You should ensure that the personal details, such as your name, address, and Social Security Number (SSN), match the details on your Social Security card. Besides, you should have the following information:
- Employer’s Name and Address
- Employer’s Identification Number (EIN)
- Total Wages and Salaries Paid
- Taxes Withheld
Filling Out the W2 Form – A Step-by-Step Guide
Now that you have collected all the necessary information let’s dive into the process of filling out a W2 form:
Step 1: Employee Information
Enter your legal name, address, and Social Security Number (SSN) in the respective boxes. Ensure that all spellings and figures are correct as they appear on your Social Security card.
Step 2: Employer Information
Enter your Employer’s legal name and address in the respective boxes. The employer’s identification number (EIN) can be found on your W2 form or your last pay stub.
Step 3: Wages, Tips, and Other Compensation (Box 1-6)
Report your total annual wages, tips, and other compensations earned in the previous year. The box 1 – Wages, tips, and other compensation, reports your taxable wages. Box 2 reports the federal income tax withheld from your wages, while box 4 reports the Social Security tax withheld from your wages. Box 6 reports the Medicare tax withheld from your wages.
Step 4: Social Security and Medicare Taxes (Box 3-7)
In box 3, report your total Social Security wage, which is capped at a maximum of $137,700 for 2020 and 2021. In box 4, report the Social Security tax withheld from your wages. Box 5 reports the Medicare wages and tips, and box 6 reports the Medicare tax withheld from your wages. Note that there is no maximum cap for Medicare tax.
Step 5: State and Local Taxes (Box 15-20)
The box 15 to 20 reports your state and local income tax information. If your state doesn’t have an income tax, leave box 17 blank. If you paid state disability insurance, report it in box 14.
Step 6: Verify and File
After you have filled out all the boxes, double-check the information’s accuracy before submitting it to the employer. The employer will send you a copy of the W2 form, which you need to file your income tax return accurately.
Conclusion
Filling out a W2 form may sound daunting, but it’s crucial to ensure that it’s done accurately. Mistakes can lead to penalties and a delay in tax refunds. Therefore, we recommend that you take your time and gather all necessary information before starting the process. A good practice is to double-check the accuracy of the information before submitting it to your employer. By following this comprehensive guide, you will be able to fill out a W2 form without any difficulty.
