W-2
A tax form employers send to employees each year reporting wages earned and taxes withheld, including federal income tax, Social Security, and Medicare.
The W-2, officially called the "Wage and Tax Statement," is the form your employer must provide by January 31 each year. It reports your total wages, tips, and other compensation for the prior tax year, along with the amounts withheld for federal income tax, state income tax, Social Security tax, and Medicare tax.
The form contains multiple boxes with different figures. Box 1 shows your taxable wages (after pre-tax deductions like 401(k) contributions and health insurance premiums). Box 2 shows federal income tax withheld. Boxes 3–6 cover Social Security and Medicare wages and withholding.
You use the information on your W-2 to fill out your tax return. The federal tax withheld (Box 2) is applied as a credit against your total tax liability. If more was withheld than you owe, you receive a refund; if less was withheld, you owe the difference. Keep your W-2 for at least three years in case of an audit.
Related Terms
Withholding
The amount of federal and state income tax your employer deducts from each paycheck and sends to the IRS on your behalf throughout the year.
Gross Income
The total of all income you receive during the year before any deductions or adjustments. Includes wages, interest, dividends, rental income, and business income.
FICA
Federal Insurance Contributions Act taxes that fund Social Security (6.2%) and Medicare (1.45%). Both employees and employers pay FICA, totaling 15.3% on wages.
1099
A family of IRS tax forms used to report income other than wages, such as freelance earnings (1099-NEC), interest (1099-INT), dividends (1099-DIV), and more.