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If you are an employee, that is earning salary from someone, you should receive
a form W-2 from the employer. The form is a “Wage and tax statement” for the year.
In order to file tax returns for 2007 you must either include a W-2 and in
case the W-2 is not received by you on time you will need to use form 4852 as a
substitute.
• As an employee you must receive a form W2 from the employer no later than
Jan 31 st. Keep a track of where all you worked during a year and gather W-2 for
each job.
• The earnings will be entered in “box 1” of the W-2. To compute total wages
for any year you need to add the box 1 amounts of each W-2 form.
• Then when filling the tax return insert the total amount earned on form
1040, 1040A, or Form 1040EZ. The format of a W-2 depends on how the employer
processes the payroll. However the content of every W-2 remains the same.
In order to prepare taxes efficiently it is advantageous to known and understand
the w-2.
* Boxes A to F of the W-2 are unique identifications:
* Box A represents the control number and the code, specific to you is
assigned by the payroll system.
• Box B is the employer’s tax identification number.
• Box C records the employer’s name, address, and other relevant information.
• Box D: This is your social security number. Always check that
this is correct.
• Box E records your personal details, your name in full.
• Box F gives your permanent address and recent address.
• Boxes 1-10 of the W-2 detail systematically your wages as well as tips,
bonuses, and so on; federal income tax withheld by employer; the social security
wages; social security taxes withheld; Medicare wages; Medicare taxes; social
security tips; allocated tips; advance EIC payment; and dependant care benefits.
• Boxes 11-20 detail: non qualified plans; compensation benefits; employee
status: statutory employee, retirement plan, and third party sick pay; detailed
tax information; state and state employer’s ID; state wages; state income tax
withheld; local wages; local income tax withheld; locality name detailing
state taxes.
• Box 12 of the w-2 details all the different compensations and benefits
like uncollected social security, uncollected Medicare, salary deferrals, retirement
plans, and so on.
• The Social Security Administration will receive copy A of W-2 directly
from the employers. The SSA will in turn send relevant details to the IRS. Copy B
of the W-2 is to be attached by you to your Federal tax return. Copy C of the W-2
is to be filed and kept by you along with other tax documents for a minimum of four
years. Copy 1 of the W-2 will be mailed by the employer to the local state tax
department and copy 2of the W-2 must be filed by you along with your state tax
returns. Copy D of the W-2 will be retained by the employer and maintained as
record for at least four years.
Detailed instructions for form W-2 are provided by the IRS at
http://www.irs.gov/instructions/iw2w3/index.html use of the instructions as well
as other online tips such as common errors.
Create a check list that will enable you to check that the W-2 received by
you has no errors.
About Author
Barry Allen is a freelance writer for Online Tax
Firm, the premier website to find tax, return tax, tax software, free tax filing, sales tax,
services tax,income tax, property tax and many more.
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