What Is IRS Form W-2?

Every January, your employer sends you a W-2. It's one of the most important tax documents you'll receive all year, and understanding what's on it makes filing your return much easier.

What the W-2 Shows

The W-2 reports two main things: how much your employer paid you during the year, and how much was withheld from your paychecks for federal income tax, Social Security tax, and Medicare tax. It also shows state income tax withheld if you live in a state with an income tax.

The Boxes That Matter Most

Box 1 is your taxable wages — this is what you report on your federal return. It's usually lower than your total pay because it excludes things like pre-tax 401(k) contributions and health insurance premiums paid through your employer. Box 2 is federal income tax withheld — this is the amount that counts as a payment toward your tax bill when you file. Boxes 3 and 5 show wages subject to Social Security and Medicare taxes, and boxes 4 and 6 show the taxes withheld for each.

Why Your W-2 Wages Might Not Match Your Pay Stubs

If you contributed to a traditional 401(k) at work, those contributions reduce your Box 1 wages even though they're still subject to Social Security and Medicare taxes. That's why Box 3 is often higher than Box 1. Contributions to a Health Savings Account (HSA) through payroll, or premiums for employer-sponsored health insurance paid pre-tax, also reduce Box 1.

Multiple W-2s

If you worked more than one job during the year, you'll receive a W-2 from each employer. You report all of them on your return. Each employer withholds Social Security tax separately, which can occasionally lead to overwithholding if your combined wages exceed the Social Security wage base — in that case, you get a credit on your return.

When to Expect It

Employers are required to send W-2s by January 31. If you haven't received yours by mid-February, contact your employer's payroll department first, and if that doesn't work, you can call the IRS. You should not file your return without your W-2.

What to Do With It

Use the numbers on your W-2 to complete your federal and state tax returns. Most tax software imports W-2 information automatically if you enter your employer's EIN (Box b) and a few key numbers. Keep a copy of your W-2 for at least three years after filing, in case the IRS has questions about your return.

If you're self-employed and don't receive a W-2, you'll use Form 1099-NEC instead, and you'll be responsible for tracking and paying your own taxes throughout the year.