Form W-2
Annual statement from employers showing employee wages and taxes withheld.
Form W-2 reports an employee's annual wages and the taxes withheld (federal, state, Social Security, Medicare) during the year. Employers must provide W-2s to employees by January 31 and file copies with the Social Security Administration. The form is essential for employees filing their personal tax returns.
Example
A small business with five employees generates W-2s showing each employee's total wages, federal and state taxes withheld, and FICA contributions for the year.
Why It Matters for Your Business
Accurate W-2s ensure your employees can file correct tax returns and protect your business from IRS penalties for late or incorrect filings.
Related Terms
More Taxes Terms
Adjusted Gross Income
Gross income minus specific deductions like retirement contributions.
Tax Audit
An examination of tax returns by the IRS to verify accuracy.
Capital Gains
Profit from selling an asset for more than its purchase price.
Capital Loss
Loss from selling an asset for less than its purchase price.
Tax Deduction
An expense that reduces taxable income.
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