How do you interpret the information presented on a W-2 form?

Short Answer: The W-2 form shows your total earnings and taxes withheld for the year.

Full Answer: Here is a detailed explanation of the key parts of the W-2 form:

Employee Information (Top Section):

• Your name, address, and Social Security number.
• Employer’s name, address, and Employer Identification Number (EIN).

Earnings and Taxes Withheld (Boxes 1–6):

• Box 1: Reports your taxable wages, tips, and other compensation, excluding pre-tax benefits like 401(k) contributions.
• Box 2: Shows federal income tax withheld from your paychecks.
• Box 3: Displays wages subject to Social Security tax, which may differ from Box 1 if you have pre-tax deductions.
• Box 4: Social Security tax withheld (6.2% of Box 3, up to the annual limit).
• Box 5: Wages are subject to Medicare tax (usually the same as Box 3, with no income limit).
• Box 6: Medicare tax withheld (1.45% of Box 5, plus an additional 0.9% if income exceeds thresholds).

Additional Information (Boxes 7–14):

• Box 12: Uses letter codes to report various benefits and contributions (e.g., 401(k) contributions, adoption benefits). Refer to the instructions for code meanings.
• Box 13: Indicates if you are in a retirement plan, received statutory employee payments, or sick pay.
• Box 14: Used for additional information, such as union dues or state disability insurance.

State and Local Taxes (Boxes 15–20):

• Box 15: State and employer’s state ID number.
• Box 16: State taxable wages.
• Box 17: State income tax withheld.
• Boxes 18–20: If applicable, local wages, tips, and local income tax are withheld.

Tip: Cross-check your W-2 with your final pay stub to ensure accuracy. Contact your employer for a corrected W-2 (Form W-2c) if you find mistakes.

General Federal Standard: Employers must provide accurate W-2 forms by January 31. The IRS uses this form to verify your tax return.