- A W-2 form is considered an information return prepared by employers for their employees. It is usually a carbon-style paper with six copies. The W-2 shows wages paid to employees for the past calendar year as well as any taxes withheld by the employer and sent to the IRS. A W-2 will also show how much in FICA taxes have been paid to Social Security that year.
- Employers are required to complete a W-2 form for each employee and the information must be accurate. Any employee that receives a salary, wage or other compensation should get one. It is a way for employees to get accurate numbers regarding income and taxes so they can go ahead and prepare personal income tax returns. A W-2 is for employees that have office space and equipment provided for them by the employer, as well as having necessary income taxes withheld by the employer. A 1099 form functions in a similar way to a W-2, but is used for independent contractors, those responsible for paying their own quarterly state and federal income taxes to the IRS and also for maintaining all business expenses and supplies.
- The form has six copies. Copy A is for the employer to turn into the Social Security Administration. Copy B goes to the employee for his federal income tax return. Copy C also goes to the employee for their own records. Copy D stays with the employer for the company records. Copy 1 and Copy 2 of the W-2 form goes to the employee for his state or local income tax returns.
- The W-2s must be sent out to employees by no later than January 31 of the year following the related tax year. This deadline allows taxpayers time to prepare their federal and state income tax returns before the April 15 deadline.
- When an employee works in more than one state, employers must provide W-2 form for each state where pay was earned. Some companies print out a W-2 form for each separate state while others will just list all the states in place on one W-2. Both versions are acceptable as long as it is clear.
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