The W-2 form is a crucial tax document that reports your annual earnings and the taxes withheld from your paycheck. Understanding each box on the form can help you file your tax return correctly and potentially maximize your refund. Here’s a breakdown of what each section means:
Boxes 1–6: Income and Withholding
- Box 1: Wages, Tips, Other Compensation – Your total taxable income for federal tax purposes (excluding pre-tax deductions like 401(k) contributions).
- Box 2: Federal Income Tax Withheld – The amount of federal tax your employer withheld from your paycheck.
- Box 3: Social Security Wages – Earnings subject to Social Security tax (capped at a limit set each year).
- Box 4: Social Security Tax Withheld – The actual amount of Social Security tax withheld (typically 6.2% of Box 3, up to the annual cap).
- Box 5: Medicare Wages and Tips – Total earnings subject to Medicare tax (no cap).
- Box 6: Medicare Tax Withheld – The amount withheld for Medicare tax (typically 1.45% of Box 5, plus an additional 0.9% for high earners).
Boxes 7–8: Tips and Allocations
- Box 7: Social Security Tips – Tips you reported to your employer, subject to Social Security tax.
- Box 8: Allocated Tips – Tips your employer assigns to you based on IRS rules (these may not have been reported on your paycheck but are taxable).
Boxes 9–11: Special Cases
- Box 9: Not used (was for a now-defunct tax credit).
- Box 10: Dependent Care Benefits – Employer-sponsored benefits for childcare (up to $5,000 tax-free, but anything above that is taxable).
- Box 11: Nonqualified Plans – Distributions from nonqualified retirement plans, which may be taxable.
Boxes 12–14: Additional Compensation & Benefits
- Box 12: Various codes for pre-tax deductions, retirement contributions, and other benefits (e.g., 401(k), HSA contributions, and more).
- Box 13: Indicates if you are a statutory employee, participated in a retirement plan, or received third-party sick pay.
- Box 14: Miscellaneous employer-reported items (e.g., union dues, tuition assistance).
Boxes 15–20: State and Local Taxes
- Box 15: Employer’s state tax ID number.
- Box 16: State taxable wages.
- Box 17: State income tax withheld.
- Box 18: Local taxable wages.
- Box 19: Local tax withheld.
- Box 20: Local tax jurisdiction name.
Why It Matters
Your W-2 determines how much tax you owe or how much you’ll get in a refund. Double-check your form for accuracy, and if something looks wrong, ask your employer for corrections before filing your tax return.
