Are you among those taxpayers who have trouble in understanding and reading W-2 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.
Since the tax season is just around the corner, there are lots of companies, ordinary individuals and employees who are cramming to get it done and file it timely. Nevertheless, you can also find some taxpayers who are confused on some tax forms and W-2 is among them. For those employees that need to pay their tax dues, then they should understand and should know how to read the Wage and Tax Statement tax form. 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 W-2 Tax Form Is?
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. 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.
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. Well, business enterprises need to prepare six W-2 tax forms for each employee. Yes, this is definitely tremendous paperwork for business enterprises. The truth is, employees can receive the W-2 tax forms, either electronically or manually.
Are W-2 Tax Forms Needed in Tax Filing?
The answer is yes, all workers need these forms in filing their taxes. All employees cannot file their taxes with their last pay stubs without completing their W-2 tax forms. Employees issue W-2 tax forms to their workers yearly, every January 31. In case you have queries on certain issues, be sure to ask your employers for clarification and guidance.