The Reasons behind the Importance of W-2 File Statement

Form W-2 Wage and Tax Statement closeup

W-2 forms are considered to be an essential part for your tax preparation process because it reports wages paid and also taxes that are withheld by employers through the course of a year. One of the best advantage of it compared to other tax-related forms would be on the fact that there’s no need for you to fill out a W-2 form. You could just receive it and then use it.

One of the things that you need to know is that you are not the only one that the employer prepares for a W-2 form. The Social Security Administration, you as well as the IRS will actually acquire a copy of it, which would be unwise if you are planning to under-report your wage or when you over-report your taxes withheld. You should be aware that you can expect a W-2 form if you are actually an employee and likewise earned a particular amount or more or if you ever have an any amount you have withheld. When you are earning money as an independent contractor, you could in fact expect a 1099 form compared to a W-2 from an employer as long you made more than their specified or particular amount.

When you will receive a W-2 form that the employer needs you to send by January 31, you will get multiple copies of it. This is for you to keep one as you a record and then include a copy with the federal tax return and the city, local or the state tax return.

It is very important that you do reviews on your W-2 form in order to make sure that the information is correct. In case your name is misspelled or your Social Security number is wrong or when this is missing, the IRS will be having problems on matching up the records on what you earned and paid on what you are reporting. This may delay the processing of the return and trigger an audit. Check What Is A W-2 Used For to learn more.

The Reasons for its Importance

You actually are aware that those that are self-employed should make estimated tax payments throughout the year as well as assume that unlike it, there’s really no need to pay your taxes until April 15. However, this is not the case. This actually is the reason as to why employees makes regular tax payments throughout the year. This would be what really happens if the employer is going to withhold taxes from your paycheck. They are in fact withheld and will be sent to the IRS. For more info, check What Happens If You Don’t File A W2 Statement?

This actually is the reason why you should take care and understand your W-2 form because it helps determine if you will get a tax refund check on that year and on how big it’s going to be. Check https://www.wikihow.com/Prepare-a-W%E2%80%902-for-an-Employee for other references.

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