The Reasons Behind the Importance of the W-2 Form
W-2 forms are considered to be crucial parts for tax preparation of people when they report on the wages that are being paid and the taxes that are withheld by the employer. A good advantage about tax-related forms is that there’s really no need for you to fill out a W-2 form. Yo simply just need to get it and use it.
The first thing that you should know is that you are not the only individual that your employer prepares for a W-2. The IRS, Social Security Administration and you will be able to get a copy, which makes it unwise of thinking about under-reporting your wage or perhaps to over-report your tax. It is also very important that you know that you may expect a W-2 form if you are an employee and that you have acquired a certain amount or had any amount withheld. When you are earning as an independent contractor, you will get the 1099 form than the W-2 from the employer as long as you are making more than the requirement.
When you received you W-2 form that your employer needs you to have, you will get multiple copies of it. This is done in order for you to keep one of the records and to be able to include a copy with your federal tax return as well as your city, state and local tax returns. If you are not able to get your W-2 on time, the IRS comes with guidelines on what you should do.
It’s essential to also do reviews on your W-2 form for you to get an assurance that the information provided is correct. In case your name is misspelled or the Social Security number provided is wrong, the IRS will have problems on matching the records which you paid and earned and to what you report them. This is going to delay the process of return and will also trigger an audit.
You may be aware that people who are self-employed usually needs to make an estimated tax payment for the whole year and you may assume that you don’t need to pay your taxes. This would not be the case because employees actually needs to make regular tax payments through the entire year. This would be what’s going on when the employer withholds the taxes from the paychecks. They actually are withheld and then will be sent to the IRS.
When preparing your taxes, your W-2 will summarize how much had been withheld to Social Security, Medicare and on income taxes. If you calculate on the total tax due for the year, you will be able to subtract how much you have paid already for the IRS and owing a little more in taxes or due a refund for overpayment.