Tax Tips

Tax Tip

Overview

Your employer is required to send you a W-2 by Jan. 31 for the previous year's income.
Copies of your W-2 are sent to you, the Social Security Administration, the IRS, any state and local government for which taxes are withheld and one is kept for your employer's records.
Sections of your W-2 are used to complete your return.

Form W-2, Wage and Tax Statement, is used to report your wages for the year and the taxes withheld from them. Your employer is required to send you a W-2 by Jan. 31. A copy of your W-2 is sent to you, the Social Security Administration, the IRS and any state or local government for which taxes are withheld. In addition, a copy of your W-2 must be retained by your employer.

Some of the items listed on your W-2 are used to complete your tax return and some are for informational purposes only.

Box b: Employer Identification Number. This is your employer's identification number with the IRS, (the equivalent of your social security number or individual taxpayer identification number). This number must be valid and match the IRS's records if you wish to e-file your tax return.

Box c: Employer's Name, Address and Zip Code. If you work for a corporation, the address is generally the address of the main office or headquarters, not necessarily the building where you work.

Box d: Employee's Social Security Number. Your social security number. If the number is incorrect, report it to your employer immediately to receive a corrected W-2. All payments withheld from your wages are credited under the social security number shown. A wrong number means that your payments are not being credited to you.

Boxes e and f: Employee's Name and Address. Your full name and current address.

Box 1: Wages, Tips and Other Compensation. The total amount of compensation your employer has record of paying you. This includes any tips, bonuses or commissions as well as wages. The amount shown in this box is entered on the "wages" line of your tax return (Line 7 of Forms 1040 and 1040A, or line 1 of Form 1040EZ).

Box 2: Federal Income Tax Withheld. The total amount of federal taxes your employer withheld from your wages the previous year. The amount shown in this box is entered on the "federal tax withheld from your wages" line of your tax return (Line 64 of Form 1040, line 38 of Form 1040A or line 7 of Form 1040EZ).

Box 3: Social Security Wages. The amount of earnings your employer paid you (not including tips) that is subject to Social Security tax. This amount may be greater than the amount shown in Box 1 due to tax-deferred income you may receive such as retirement plan contributions. For 2007, the total of boxes 3 and 7 shouldn't exceed $97,500.

Box 4: Social Security Tax Withheld. The amount of Social Security tax withheld on your wages. For 2007, this amount can't exceed $6,045. This amount should equal 6.2% of the amount shown in Box 3.

Box 5: Medicare Wages and Tips. The total amount of earnings your employer paid you subject to Medicare tax. This amount will include any amounts of deferred income that you received.

Box 6: Medicare Tax Withheld. The amount of Medicare tax withheld on your wages. This amount should equal 1.45% of the amount shown in Box 5.

Box 7: The amount of tips you received that you reported to your employer. This amount combined with the amount in Box 3 is used to figure the Social Security and Medicare tax (if any) you owe on tips you didn't report to your employer.

Box 8: Allocated Tips. The amount of tips your employer allocated to you. This amount is in addition to the amount you reported shown in Box 7. The allocation is generally based on credit card receipts and IRS formulas. If you have an amount shown in this box, you generally need to complete Form 4137 to pay Social Security and Medicare tax on the amount. The total of Box 8 must be included with the amount in Box 1 and appear on your tax return. See IRS Publication 531 for situations in which you may not need to report this amount on your return.

Box 9: Advance EIC Payment. The amount of the Earned Income Credit (EIC) your employer paid you in advance. There should be an amount in this box only if you requested the advance payment because you expected to qualify for the credit. If there is an amount in this box, you are required to file a return even if your income is below the filing requirement. Enter the amount In Box 9 on line 61, Form 1040, or on line 36, Form 1040A. Form 1040EZ can't be filed if you received advance EIC.

Box 10: Dependent Care Benefits. The amount of your income you elected to defer from tax and use for payment to your dependent care provider. You must file Form 2441 or Schedule 2 (Form 1040A) to determine whether any part of this amount is taxable.

Box 11: Nonqualified Plans. The total amount of payments received from your employer's nonqualified plan. This amount is included in Box 1 and is taxable.

Boxes 12a, 12b, 12c, 12d. These boxes are used for various reporting purposes. Following is a partial list of what some of the codes mean:

A — Social Security tax that your employer couldn't withhold because there wasn't enough income to cover the tax. This amount should be included in the total on line 63, Form 1040.
B — Medicare tax that your employer couldn't withhold because there wasn't enough income to cover the tax. This amount should be included in the total on line 63, Form 1040.
D — Pre-tax contributions to an employer's 401(k) plan. This amount isn't included in Box 1 and isn't taxable to you.*
E — Pre-tax contributions to an employer's tax-sheltered annuity plan. This amount isn't included in Box 1 and isn't taxable to you.*
F — Pre-tax contributions to an employer's salary reduction SEP. This amount isn't included in Box 1 and isn't taxable to you.*
G — Pre-tax contributions to an employer's section 457 retirement plan. This amount isn't included in Box 1 and isn't taxable to you.*
J — Amount of sick pay not taxable because the employee contributed to the plan.
Amount of business expense reimbursement paid based on a per diem of business expenses. You can't deduct this amount. Any amounts in excess of the federal per diem will be included in Box 1 and is taxable to you.
L — Amount of business expense reimbursement paid based on a per diem or per mile basis. You can't deduct this amount. Any amounts in excess of the federal per diem will be included in Box 1 and is taxable to you. If you're deducting expenses in excess of this amount, complete Form 2106.
P — Amount of moving expense reimbursement paid to the employee. This amount is neither taxable nor deductible.
Q — Amount of nontaxable military combat pay. You can treat this amount as earned income for purposes of the Earned Income Credit, the Additional Child Tax Credit, and for purposes of making an IRA contribution.
S — Pre-tax contributions to an employer's SIMPLE plan. This amount isn't included in Box 1 and isn't taxable to you.*

*If you worked for more than 1 employer, see IRS Publication 525 to determine whether any of this amount is taxable.

Box 13: Statutory Employee, Retirement Plan, Third Party Sick Pay. One of the boxes will be checked if it applies to you.

Statutory employee — If you're a statutory employee, your W-2 should have Social Security and Medicare tax withheld, but no federal or state taxes withheld.
Retirement plan — If you're covered by any sort of employer retirement plan, whether you contribute to it or not, this box will be checked. Your deductible IRA contributions may be limited.
Third-party sick pay — If you received any payments for sick pay from a third-party provider, this box will be checked. Any amounts paid due to premiums paid by your employer will be taxable to you. Amounts paid from your own contributions won't be taxable.

Box 14: Other. This is used by your employer to provide you with additional information that may or may not affect your tax return. Items commonly reported in this box include union dues, United Way contributions, Tier I and Tier Railroad retirement contributions, the lease value of a vehicle provided to an employee, state disability insurance tax withheld, after-tax contributions to 401(k) plans and wages from disposing of stock acquired by exercising incentive stock options.

Box 15: State. The postal abbreviation indicating the state for which taxes were withheld and the employer's state identification number.

Box 16: State Wages, Tips, etc. The amount of your wages subject to state tax. This amount may differ from the amount shown in Box 1.

Box 17: State Income Tax. The amount of taxes withheld for the state indicated in Box 16.

Box 18: Local Wages, Tips, etc. The amount of your wages subject to local income tax. This amount may be different from the amount shown in Box 1 and/or Box 16.

Box 19: Local Income Tax. The amount of taxes withheld for the locality indicated in Box 20. This amount is entered on the appropriate line of your local tax return.

Box 20: Locality Name. The name of the locality for which taxes were withheld.

If you have additional questions about how to read your W-2, please check with one of our tax professionals.

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Frequently Asked Questions

Question: When do employers normally send out W-2s?
Answer: Employers are required to provide Form W-2 no later than Jan. 31. If you leave your job before the end of the year, you have the right to request that your employer provide you with a W-2 within 30 days of the request or 30 days after the date of the last wage payment your employer makes to you, whichever is later.

Question: My W-2 is incorrect. What should I do?
Answer: It depends on what is incorrect. If the dollar amounts are correct, go ahead and file the return as you normally would. If the dollar amounts are incorrect, ask your employer for Form W-2C showing the correct amounts and file that form with your return. If you can't get Form W-2C, get Form 4852 from H&R Block's Forms Center.

Question: I have not filed my return but can't find my W-2s. What do I do?
Answer: First, ask your employer for another copy. If you have paystubs that show the required figures, complete Form 4852 and attach it to your return. If you can't get a W-2 and don't have the required information, you can get the information from the IRS by filing Form 4506-T. If you don't have the information by the due date of the return, file for an extension to file. If you don't file (or if you file without the information from the missing W-2), you'll receive a letter from the IRS within 12 to 18 months of the due date of the return showing your tax computed with the missing income. You must then pay any tax you owe, along with penalties and interest.

More W-2 FAQs

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