What is a W-2 Form? - Napkin Finance

Form W-2

Company Man

The W-2 is a tax form your employer must complete at the start of each year to report what you earned in the previous year and how much it withheld in taxes.

How used

Employers fill out the W-2 form for each of their employees every year and send it to the:

  • Employee—who uses the information to fill out their federal and state tax returns.
  • IRS—which matches it against the employee’s tax return to see if they owe additional taxes or are due a refund for the year.
  • State and local tax entities—which use it to determine whether you owe taxes or need a refund.
  • Social Security Administration—which keeps track of how much you’ve paid into the Social Security system, which determines the benefits you get when you retire.
What’s included

W-2 forms are standardized, so no matter where you work, you can always expect the same thing. Each contains information reported in boxes, including:

  • Your personal information, like your name, mailing address, and Social Security number
  • Your employer’s information
  • Total taxable earnings for the year (including tips and bonuses)
  • The amount of federal, state, and local tax withheld
  • Medicare and Social Security taxes withheld
  • Any dependent care benefits you received
  • Your contributions to an employer-sponsored retirement plan, like a 401(k), for the year
W-2 vs. W-4

Don’t confuse the W-2 you get each with another IRS form known as the W-4. That’s the paperwork you fill out when you start a job, not what you need to file your taxes.

W-2 W-4
Who fills it out? Employer Employee
Who uses it? Employee, IRS, state and local governments, Social Security Administration Employer
When is it completed? Every year When you start a new job or if you need to update your information
What is it for? Reports pay and the amount of taxes withheld from your paycheck throughout the year Tells your employer how much to withhold in taxes (based on factors like the number of kids you have and whether you’re married)
Good to know

For the most part, W-2s can cause fewer headaches than other types of tax forms. But there are still a few nitty-gritty details it’s important to know about:

  • You’ll generally receive a W-2 form if you earned more than $600 during the previous calendar year or if you had any money withheld from your earnings.
  • Not all workers receive a W-2. For example, contract and gig workers typically receive a 1099 instead.
  • Your employer must send you your W-2 form before January 31 each year to give you enough time to file your taxes.
  • You still need to file your taxes even if you don’t get your W-2 from your employer. The IRS suggests that you contact your employer if you haven’t received your form by mid-February.
  • It’s good practice to double-check everything on your W-2 before you file your taxes. Something as simple as a misspelled name could delay your return or result in an audit.
  • You must always submit a copy of your W-2 with your tax return whether you e-file or file by mail.

Each year your employer reports your pay and withheld taxes on a W-2 form. This information goes to you along with the IRS, state and local governments, and the Social Security Administration. You use it to file your taxes, while governments use it to make sure you’ve paid what you owe and check if you need a refund.

Fun facts
  • If your employer gives you a bribe, you’re technically supposed to report that income to the IRS (though it probably won’t show up on your W-2).
  • Americans spend nearly nine billion hours a year complying with IRS paperwork requirements.
Key takeaways
  • Your employer must submit a W-2 form each year to you and the IRS.
  • This form will help you file your state and federal income tax returns. The IRS uses it to make sure you’ve paid what you owe.
  • Because W-2 forms are standard, they all include the same information, such as your name, wages, and taxes withheld.
  • Your employer uses a different form, the W-4, to help determine how much of your wages it needs to withhold for taxes.
If you think W-2s are tough, wait till you get to W-9s. — Napkin Finance


By signing up, I agree to Napkin Finance’s Terms of Service and Privacy Policy.

The simple information you need
to clean up your not-so-simple finances.