How to Read a W-2: A Line-by-Line Guide for Beginners
Tax season can be confusing, especially when you get your W-2 form from your employer. But don’t worry! Here’s a simple guide to help you understand each part of the W-2 form and what it means for your taxes.
1. Box A – Employee’s Social Security Number
This is your unique SSN. Ensure it’s correct as it links your earnings to the IRS.
2. Box B – Employer Identification Number (EIN)
This number identifies your employer. It’s important for tax purposes, especially if you need to contact the IRS about your W-2.
3. Box C – Employer’s Name, Address, and ZIP Code
This shows where your employer is located. Double-check this info to ensure it’s accurate.
4. Box 1 – Wages, Tips, and Other Compensation
This is your total taxable income from the job. It includes your salary, bonuses, and any other compensation (but not pre-tax benefits).
5. Box 2 – Federal Income Tax Withheld
This is how much federal tax your employer has withheld from your paycheck.
6. Box 3 – Social Security Wages
This is the amount of your income subject to Social Security tax. It might be different from Box 1 if you contributed to pre-tax retirement or healthcare plans.
7. Box 4 – Social Security Tax Withheld
This is the amount of Social Security tax that has been deducted from your pay.
8. Box 5 – Medicare Wages and Tips
This is your income subject to Medicare tax. Like Box 3, it can differ from Box 1.
9. Box 6 – Medicare Tax Withheld
The amount of Medicare tax withheld from your pay.
10. Box 12 – Codes and Amounts
Here, you’ll see additional important information like retirement plan contributions or other pre-tax benefits. There might be multiple codes and amounts depending on your benefits.
11. Box 13 – Statutory Employee, Retirement Plan, or Third-Party Sick Pay
If checked, it indicates you are a statutory employee, enrolled in a retirement plan, or receiving third-party sick pay.
12. Box 14 – Other
This box is used for any other deductions or information your employer wants to include, such as union dues or other pre-tax benefits.
13. Boxes 15-20 – State and Local Taxes
These boxes show the state income tax withheld, as well as any local taxes. States have different rules, so check the details.
Final Thoughts
Once you understand each section, you’ll be ready to use your W-2 for filing your taxes. Keep it safe and refer to it when completing your tax forms. If anything looks wrong, reach out to your employer for clarification before filing.