Before you file your taxes this year, ensure you understand the paperwork.
Are you ready to begin the process of filing your taxes? You should receive your W2 by the end of January. There are a lot of boxes on that W2 but don’t let is worry you. With a little help, the information in the boxes is fairly easy to understand.
Boxes A-C contain information about your employer. You will only need the information in Box C, which is your employer’s address.
In Boxes D-F you will find your personal information. You need to make sure that all three boxes are correct. If there is an error you may correct it on the W2. Be sure to let your employer know what is wrong so they can correct their records.
The next section of numbered boxes include information about your salary, taxes you have paid, and benefits that are nontaxable.
- Box 1 is your total pay for the year. It includes all commissions, tips, back pay, and any other wages.
- Box 2 tells you how much federal tax was withheld.
- Boxes 3 and 4 show how much of your salary was eligible for social security taxes.
- Boxes 5 and 6 have information about your contribution to Medicare taxes.
- Boxes 7 and 8 shows how much you earned in tips. This amount is already in Box 1 if you reported all of your tips to your employer.
- Box 9 will be blank unless you applied for Advanced Earned Income Credit.
- Box 10 will be blank unless you received benefits from your employer for daycare. That amount is already in Box 1.
- Box 11 concerns deferrals. These are already accounted for in other boxes so you don’t need to worry about them!
Boxes 12-14 have any nontaxable or tax-deferred benefits that you received. You will want to pay special attention to these boxes to make sure the amounts are correct. This can make a big difference in the amount you owe or get refunded!
The remainder of the boxes contain information for your state taxes. These numbers may be different from the federal boxes because each state has different tax laws.
If you do not receive your W2 by January 31st you must contact your employer. Many times the problem is simply an incorrect address. If your employer does not issue you a new W2 by February 16th you will need to contact the IRS. It is helpful is you have your last paystub from the previous year.