IRS needs the employers to report wage and salary information via Form W-2. And Form W-2 is needed by the employees to prepare the tax returns. A W-2 is not a W-4. A W-4 form is the one the employees use to tell their employer how much tax to withhold from their paycheck every pay period. This is valid for an employer-employee relationship and not for the Freelancers or contract workers.
Form W-2 is the Wage and Tax Statement reporting an employee’s income from the prior year. It clearly depicts how much tax the employer withheld from the employee’s income and other such information. Employees need to send a copy of it to the IRS once the employers have sent it to them in January (and they send a copy to the IRS).
Employees should expect Form W-2 from their employers by the end of January each year, if the employer has paid at least $600 as wages during the year. This information helps the employees to know whether they can expect a refund or they will have to pay more tax by April. So the W-2 is needed to complete the tax procedure.
Also check: Ways on How to Find my W2 Online
The employees and the employers need to take the Form W-2 seriously. It is not to be shoved in the drawer and to be kept a secret as such. The IRS and the state demands the form through letters if they don’t receive it on time.
Form W-2 tells employees how much they have earned from their employer in the past year and the withholding tax they have already paid on the earnings. W-2 information is not a secret and is required while doing the taxes. The employers are legally required to send copies of W-2 to the Social Security Administration and IRS (“Copy A”) plus to the state and local tax authorities (“Copy 1”).
