A W-2 is an Internal Revenue Service (IRS) tax form employers are required to use to report an employee’s wages (cash, cash equivalent & taxable benefits) if they are least $600 or more and tax information including federal and state income taxes in addition to social security and Medicare tax. Information presented on the form includes the employees name, address, annual wages, and tax withholdings. Employers prepare the form each year for employees to use when filing their annual federal and state income taxes.
Federal Income Taxes withheld are based on information from a form completed by employees called a W-4, typically, when starting a new job or when a life changing event occurs in their current job. The W-4 documents marital status, the number of dependents the employee will claim and any other adjustments the employee wants to include. This form is used to calculate how much with be withheld in federal income taxes.