The IRS expects to receive around 155.1 million tax returns in the calendar year of 2020.
If you’ll be one of the people making these returns, chances are you’re familiar with the W-2 form. However, if you’re relatively new to the art of paying taxes, you may find yourself asking; “what is a W-2 form?”
While all matters that pertain to taxes can seem confusing and intimidating, the W-2 is easy to get your head around if you get the right guidance.
Keep reading as we tell you everything you need to know about this aspect of tax.
What Is a W-2 Form?
The W-2 form is the official document that details the amount of tax that will be withheld from your paycheck every time you receive your wages. This amount can differ on the basis of a number of factors, including the state you live in and your family situation.
What Details Are on a W-2 Form?
There are many different pieces of information on a W-2 form. These include your name, address, date of birth, and social security number. It will also detail your earnings and your family circumstances.
This information is important as it enables the IRS to keep tabs on taxpayers. If someone’s returns don’t make sense to the authorities, they need a way of following up to make sure the taxpayer in question isn’t committing fraud.
What Are the Rules in Relation to W-2 Forms?
Submitting a W-2 form is an obligation that falls to you as a taxpayer. You need to include a completed copy of the form every time you send in a tax return. However, you should note that the W-2 form won’t be a requirement for you if you’re self-employed.
If you’re an employer, there are also certain rules that apply to you in terms of how you manage the W-2 forms of your employees. You’ll have to report the payment information of all the workers you have on your books, including the amount they earn and the tax that is withheld from each worker.
If the administration of your workforce’s payment details is becoming a drain on your schedule as an employer, there are many time-saving options you could explore. Payment stub generators (like the one available at https://www.thepaystubs.com/w2-form-create) can optimize the process of recording payment to a huge extent compared to manual preparation.
Keeping on Top of Everything to Do With Your W-2
So, what is a W-2 form? By now you should have a much better idea of the answer to this question and how it relates to your working life.
Doing your taxes can always seem like a scary prospect. However, the more information you have about these kinds of processes, the better equipped you’ll be to deal with them properly.
Did this article have the information you were looking for? If so, be sure to have a look at some of our other content too. By following our social media profiles and subscribing to our newsletter, you’ll ensure you don’t miss anything we publish.