How to Read IRS Form W2

By January 31 of each year, your employer is required to send you an IRS W2 form so you can file your tax return. Boxes A through E are straightforward, listing yours and your employer's addresses and federal tax identification numbers. However, it is important to know how to read the other boxes and transfer the information to your tax forms.

Things You'll Need

• Copy of your IRS W2 form for the previous year

Instructions

Read the Various Boxes on a W-2 Form

1. Read Box 1 for your wages, tips and other compensation. This is the total amount that your employer has a record of paying you during the previous calendar year. It includes wages, tips, commissions and any bonuses you might have received.

2. Check Box 2 for the amount of federal income tax that your employer withheld from your wages during the previous year.

3. Scan Box 3 for the amount of earnings your employer paid you that is subject to Social Security tax.

4. See Box 4 for the amount of Social Security tax that was withheld. It should equal 6.2 percent of the amount in Box 3.

5. See Box 5 for the total amount your employer paid to you that is subject to Medicare tax.

6. Check if the amount in Box 6 is 1.45 percent of the figure in Box 5. It is the total amount of Medicare tax that was withheld from your pay.

7. Look at Box 7 for any tips you earned that you reported to your employer.

8. Check Box 8 for the tips that your employer allocated to you. This figure is in addition to the amount in box seven.

9. Scan Box 9 for the Advanced Earned Income Credit payment.

10. Read Box 10 for dependent care benefits. You chose to defer this amount of income from tax and paid it to your dependent care provider.

11. Study box 11 for the total amount that you received from your employer's nonqualified plan.

12. Boxes 12a through 12d will list various items, such as your pre-tax contributions to your employer's 401(k), SEP or SIMPLE plan, nontaxable sick pay and combat pay that is excludable.

13. Read Box 13. One box within it will be checked if it applies to you: statutory employee, retirement plan or third-party sick pay.

14. Get additional information from Box 14. For example, employers might list your union dues or the after-tax 401(k) contributions you made.

15. Verify your state in Box 15. Box 16 lists the amount of your wages that are subject to state taxes. Box 17 is the amount of state tax that was withheld for the state listed in box 15.

16. See Box 18 for wages and tips that were subject to local income tax. Box 19 shows the amount of tax withheld for the city or locality that appears in Box 20.

Tips & Warnings

• IRS W2 forms are for employees. If you are an independent contractor, you will receive 1099 forms from each customer who paid you $600 or more in a calendar year.