6 THINGS YOU NEED TO KNOW ABOUT YOUR W-2 FORM IN 2018

6 THINGS YOU NEED TO KNOW ABOUT YOUR W-2 FORM IN 2018 NERDWALLET.COM

The W-2 form, formally called the “Wage and Tax Statement,” details your compensation from an employer.

The basics

1. You need your W-2 to do your taxes

Don’t confuse a W-2 with a W-4 — that’s the

Your W-2 tells you how much you earned in the

form you use to tell your employer how much tax

past year and how much you already paid in

to withhold from your paycheck every pay period.

taxes on those earnings.

And notice the key word here: employer.

When you do your taxes, you’ll need the W-2 to

Freelancers or contract workers get 1099s from

fill in a lot of the information.

their clients, not W-2s.

If you’ve ever been somebody’s employee,

2. It’s about more than just your pay

you’ve probably noticed that every January or February, you receive a form with a lot of little

Sure, your W-2 shows how much you earned in

boxes on it in the mail. It’s not a bill — it’s a W-2,

wages and tips. But it also details other stuff, such

and every employer that paid you at least $600

as the amount you contributed to your retirement

during the year has to send you one.

plan during the year, how much your employer

The W-2 form is really important. For most

paid for your health insurance, or even the

people, the information on it determines

amount you’ve received in dependent care

whether they’re getting a refund or writing a

benefits. All of that data affects your tax picture —

check come April. Here are six things you need to

your retirement contributions might not be

know about how to handle it.

taxable, for example.

https://artesiantitle.com/

3. It’s not a secret Employers are legally required to send copies of your W-2 to the Social Security Administration (“Copy A”) and your state and local tax authorities (“Copy 1”).

You won’t get away with anything if you just shove your W-2 in a drawer and decide not to put the information on your tax return. In fact, you’ll probably get a terse letter and a few months’ worth of headaches from the IRS — and the state, if your state has income taxes — after they compare your return to the information your employer sent to the Social Security Administration.

4. Your employer has to send you a W-2 by the end of January The IRS requires employers to furnish their W-2s to the government and employees by Jan. 31 or face penalties.

The IRS defines furnish as “get it in the mail,” which means you should have your W-2 in hand by the first week of February.

Employers can also send employees their W-2s electronically, but it’s not required.

Even if you quit your job months ago, your ex-employer can still wait until Jan. 31 to send you a W-2 — unless you ask for it earlier, in which case the employer has 30 days to provide it.

Interesting note: If you die, you’ll still get a W-2 that year.

5. Your employer might make an error If your employer leaves out a decimal point, gets your name or a dollar amount wrong, or checks the wrong box — it happens — point out the mistake and ask for a corrected W-2.

Pointing out the mistake and waiting for a new W-2 will cost you time, but here’s something that could make you feel better:

The IRS might fine your employer if the error involves a dollar amount or “a significant item” in your address.

6. The correct address is really important If your W-2 doesn’t show up by Valentine’s Day, first ask your employer for a copy and make sure it’s got the right address.

If that doesn’t fix things, call the IRS (1800-829-1040). You’ll need to provide information about when you worked and an estimate of what you were paid.

Remember that your tax return is still due in April, so you might need to estimate your earnings and withholdings to get it done on time. Go here to learn more about getting an extension. Plus, the IRS might delay processing your return — read: refund — while it tries to verify your information.

If your W-2 finally shows up after you already filed your tax return, you might need to go back and amend it.