W2 Form Help
The Internal Revenue Service relies on the employer to provide accurate information on the Form W-2. Employees trust the Form W-2 to file annual federal, state and city income taxes. This form provides your retirement information to Social Security as well. The employer provides this wage and tax statement to all employees by Jan. 31 of the year after you earn the income.
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Employer
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An employer provides W-2 forms to employees only. Contract workers receive Form 1099-MISC. Your employer must use black ink to complete the W-2 form, and enter your name correctly in Box E. The first name and middle initial go in the first box; the last name goes in the second box. There should be no dollar signs for the income amounts, and your employer must add decimal points for entries for cents. Do not make corrections by hand, but return the W-2 to your employer to correct and send through proper channels if you find an error. The IRS reads these forms by machine, and they must be machine-readable.
Employee
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Check over your W-2 form for accuracy and understanding. Compare your Social Security number with the number in the top box. This is how your retirement funds information registers each year with Social Security. Be sure you have the correct W-2 with your name spelled correctly and in the appropriate blank. Compare the figures with your pay stubs or records. If you get paid every week and worked all year, multiply the federal tax on your pay stub by 52 to estimate the figure that should appear in Box 2. Multiply by 26 if you get paid every other week; multiply by 24 if you get paid twice a month.
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Social Security Tax
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Federal Insurance Contributions Act (FICA) taxes include Social Security and Medicare. The employee's share of Social Security taxes in 2010 was 6.2 percent. Social Security wages in Box 3 multiplied by 6.2 percent should be the figure shown in Box 4 for 2010 taxes. The employee's share of Social Security taxes in 2011 is 4.2 percent. Multiply the Social Security wages in Box 3 by 4.2 percent for 2011. Your Social Security wages should not be higher than $106,800 in 2010 or 2011, as this is the taxable limit.
Medicare Tax
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Medicare taxation in 2010 and 2011 is 1.45 percent on all of your earned income. Box 5 should total all of your earned income from this employer, and Box 6 has the Medicare tax withheld. Multiply your earned income from Box 5 by 1.45 percent to compare with the tax shown in Box 6. If you receive tips, your employer may make entries in Box 12 to reflect uncollected Medicare taxes on tips. Your employer codes this as "B" with a dollar amount to reflect uncollected tax. An "A" with an amount is for uncollected Social Security taxes on tips.
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References
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