Understanding Your W2 Form

Here’s what you should know about your tax statement and how to read a W2 form.

How to Read a W2 form

A W2 form reports the total amount of taxes, federal, state, and others, and it’s a necessity when it comes time to file your taxes. 

Whether you’re an employer or an employee, you need to understand how to fill out and how to read a W2 form to succeed in your career. 

We’ve put together this quick guide to teach you how to navigate your W2 form this year. 

How to Read a W2 Form

There are a lot of little boxes on your W2 form, and they all mean different things. If you don’t know what you’re doing, filling one out—or even just understanding it—can be overwhelming or confusing. 

Here’s a quick breakdown of what information goes in each box. 

Box a

This box is for your Social Security Number.

Always double check that your Social Security Number is correct. If it’s not, you should request a new W2 from your employer. 

Box b

Box b shows your employer’s EIN. 

If you’re an employee, you don’t need to worry about this box. As an employer, your EIN is like the Social Security Number for your company. 

Box c

Your employer’s address goes in this box. 

This address might not match the address where you work. But that’s okay. Remember, this is the legal address of your employer. 

Box d

The number in Box d is an internal number of your employer or payroll department uses. If you’re an employer that doesn’t have a payroll department, there are several other tools you can use for payroll instead, such as https://www.paystubcreator.net.

This box might also be blank. Again, that’s okay. Some employers don’t use internal control numbers. 

Boxes e and f

These two boxes might seem like the same box. That’s normal. 

Your full, legal name is written in Box e. Box f should have your current mailing address. If the address on your W2 isn’t up to date, you should contact your employer and get it corrected. 

Box 1

This box shows the total amount of wages you’ve made throughout the year. This includes things like tips and other compensation. 

Box 2

Box 2 depicts the total amount of federal income taxes that have been withheld from your compensation through the year. You’ll want to make sure this number isn’t too low or too high. 

Box 3

The number in this box is the total amount of wages subject to Social Security tax. This number might be smaller than the amount in box 1. 

Box 4

This box also shows the Social Security Tax. But this amount is the Social Security taxes that were actually withheld throughout the year. 

Box 5

Box 5 shows the total wages that are subject to Medicare taxes. Since there is no cap for this tax, it might be a high number. 

Box 6

The number in this box is the actual about of Medicare taxes that have been withheld from your pay. Depending on things like self-employment or your filing status, you might have to pay more than what’s listed here. 

So always double check the numbers. 

Box 7

If you made any tips during the year, they will be documented in this box. If you didn’t make any tips, this box will be blank. 

Box 8

Box 8 accounts for your allocated tips. These are tips your employer has attributed to you. 

Box 9

This box might be empty. If not, it will have a 16-digit verification code. 

Box 10

This box reports the total amount of benefits paid on your behalf if you’re in a dependent care assistance program. If you aren’t in one of these programs, you don’t have to worry about this box. 

Box 11 

The amount in this box is what your employer distributed to you from their non-qualified deferred compensation plan. But these amounts aren’t contributed by you

Box 12

This box contains a number of different codes. You can learn more about them here

Box 13

Box 13 isn’t just one box. It’s actually three boxes smashed together. Your employer will check the appropriate boxes that apply to you in this section. 

Box 14

In this box, your employer will report anything that didn’t fit in any other box. This might include things like union dues, disability insurance taxes that were withheld, or nontaxable income. 

Box 15

This box contains your employer’s state’s tax identification number and state identification number. If your state doesn’t require this type of report, this box will be blank. 

Box 16

Box 16 shows the total amount of taxable wages subject to state taxes. Depending on your situation, you might not be subject to these types of taxes. 

Box 17

This box shows the total amount of state income taxes that have been withheld from your pay. Again, this box will be blank if box 16 is empty. 

Box 18

If you have any local, city, or state income taxes, you will find these listed in box 18. Your employer will send you a second W-2 form if you are subject to withholdings from multiple different states. 

Box 19

The total withholdings from the taxes listed in box 18 will be shown in this box. Again, you might need a second W-2 with extra information in another box 19 if you are subject to withholdings in more than one state. 

Box 20

This last box includes three different pieces of information. But they’re simple and easy to understand. All they are is the name of your local, city, or state income tax that’s listed in box 18. 

Understanding your W2 Form

Knowing how to read a W2 form is an important—and necessary—skill to have when April rolls around. This is especially true if you’re getting ready to start your own business

But you might need some additional support to get your company up and running. 

Make sure you click here to take a look at seven important technologies you should use for your business.

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