The W-2 Form shows the amount of taxes that have been withheld from your income throughout the year. It is what you use when you file both your federal and state taxes.
What is the W-2 Form?
Employers are required to report all income on their employees to the IRS on Form W2. The W-2 is where you will find the amount of federal, state and any other taxes that have been withheld from your paycheck. This form is very important as you cannot file your tax return without it. To make sure that you have enough time to file, the IRS requires employers to send you your W-2 form by January 31st.
What You Need to Know About W-2 Wages and Withholding
The W-2 form has various boxes that report your income. Box 1 shows your annual wage and salary payments while box 2 shows the federal taxes that were withheld from your income. Since only a portion of your income is social security taxable it’s not uncommon to notice that box three is lower than the amount featured in the other boxes.
Importance of Your Tax Withholding
All of the money that your employer withholds from your paycheck for federal tax purposes is given to the IRS. Even though it may seem unfair it is actually for the best because if things were not done this way you would have to pay the entire amount by the April 15th deadline which is not doable for most people. This way, by making payments throughout the year, you can decrease or balance out the amount of money that you owe the IRS in taxes.
When it is time for you to file your federal taxes for the year the amount of money that was withheld from your pay will be deducted from your taxes. Once this is done you will either get a tax refund or make additional payments. The same thing goes for your state taxes.
Verifying Your Name and Social Security Number
The identifying information section on the W-2 is basically a tracking feature. If your income reported on your return does not match your W-2 the IRS is going to question why.
Attaching Your W-2
Once your tax return has been completed you are going to have to attach your W-2 to it. If you file using TurboTax they will electronically send your W2 online to the IRS. However, if you chose to file by mail you will have to put a copy of your W-2 on the front of your tax return.
The import feature found in TurboTax securely retrieves W-2, 1099, and 1098 data from hundreds of participating employers and financial institutions, saving time and data entry errors. Depending on the availability of these documents from your financial institution and employer, this feature will make your w-2 accessible in TurboTax.
What to Expect When Filing Your Taxes with TurboTax
Making the decision to file with TurboTax online is your key to making tax season less stressful. You do not have to be familiar with the tax code. Instead all you have to do is answer a few questions about your tax situation and TurboTax will put your information on the correct tax forms, and bring to your attention the deductions and credits that you are eligible for.