Nobody likes to give away their earnings, yet this is what you have to do when that time of year rolls around every spring. Tax season is no fun for anyone, but you can make the process go a lot smoother with a W-2 tax form.
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What is a W-2 tax form, you ask?
If you’re not familiar with this form, that’s okay. It’s hard to keep track of all the paperwork you have to deal with throughout the year. But this is one form you don’t want to forget.
Read on to learn about the W-2 tax form and why it should matter to employers and employees alike.
What Is a W-2 Tax Form?
So what is a W-2 form, exactly? Every year the IRS requires businesses to report employees’ salaries, wages, and how much in taxes was withheld from employees’ wages. All this can be found on a W-2 form.
If you’re an employer, you should send your employees their W-2s no later than January. When tax season arrives, your employees will need their payment information.
Freelance, contracted, and self-employed workers receive other forms, so employees are the only ones who should be asking, “What is a W-2?”
Why Does It Matter?
While a W-2 matters for obvious short-term payments, it can also impact your financial earnings down the road. Here are a few reasons why you should pay close attention to your W-2 form.
Tax Season
All W-2 employees need their W-2 forms to complete taxes. If you report tax information that doesn’t match the form, the IRS will give you headaches.
Your W-2 also contains any health insurance and dependent care benefits you’ve received from your employer. Depending on the circumstances, some of your income may not be taxable.
So get your W-2 form right, and you might shave some money off your tax bill.
Social Security
Employers are required to report wages to the IRS, but you may not know that they must also contact the Social Security Administration.
Your annual earnings are used to calculate your Social Security and retirement benefits. This means you’ll want to keep the information on your W-2 as accurately as possible.
As long as you stay consistent with your personal and payment information, you can set yourself up for rewards later on in life.
Where Can I Find a W-2 Form?
If you’re an employer who’s procrastinated on payment records, don’t panic. Creating a W-2 tax form has become easier with online options available.
So if you’re wondering how to find a great W2 generator, you have convenient choices at your disposal. Simplify the tax process by letting technology do the heavy-duty work for you.
Reap the Benefits of Your Work
People always shudder at the thought of tax season, but you shouldn’t have to fear big losses. In fact, you can minimize your losses if you record your taxes correctly.
So what is a W-2 tax form? Sure, it saves you time and money. But it’s also a lifesaver later on when you discover rewards you’ve earned from your employment. If you’re ready to capitalize on years of hard work, then be sure to make note of them in your W-2 form and tax records.
And for more ways to save, check out the money-saving tips our finance section offers.