What does Form W2 mean?
Form W-2, Wage and Tax Statement, is the standard form used by employers to report the salary, hourly wages, and any tips earned by an employee during a given tax year, as well as the taxes withheld from those earnings by the employer. The taxes withheld on Form W-2 include federal income tax, Social Security tax, and Medicare tax.
Each employer is required by law to submit four copies of Form W-2. The four copies are distributed as follows: one to the employer, one to the employee, one to the Social Security Administration to pass on to the Internal Revenue Service, and one to the state taxing authority. Employers are required to mail the Form W-2 to employees no later than January 31 following the tax year.
Form W-2 serves as one of the checks and balances used by the Internal Revenue Service when reviewing tax returns. Since the Internal Revenue Service has a copy of each taxpayer's Form W-2, the Internal Revenue Service can confirm wages, salaries, and tips were reported by the taxpayer accurately on the tax return.