How to Read a W2

You want to make sure you get the most back on your taxes possible, meaning you need to understand everything you can about the tax process. But many people are unsure of how to read the W2 statement they receive from their employers.

If you want a crash course on how to read a W2, keep reading!

Your W2 Broken Down

Your W2 is a series of boxes and codes. Let’s break them down, one by one.

Box A is your Social Security Number or your federal identification.

Box B is your employer’s identification number or your employer’s federal identification.

Box C lists your employer’s info, like name and address.

Box D is a box for a code your employer may choose to use to identify you that is sometimes just left blank.

Box E contains your name.

Box F will list your address.

Box 1 is your total taxable wages. This includes reported tips and other taxable compensation, but won’t include money you deferred to benefits like 401(k) plans. 

Box 2 is the federal income tax your employer took out of your wages for that tax year. You can also see this on your paystubs, available in paper form or from online generators like www.paystubs.net.

Box 3 is the number of total wages paid to you that can be taxed for Social Security. This may or may not be the same as Box 1.

Box 4 is the Social Security tax taken out of the wages you reported to your employer. 

Box 5 will be the total wages that are subject to Medicare tax. Again, this number may be different than boxes one and three, as all three have different criteria about taxable amounts.

Box 6 includes how much of your wages were actually taken for Medicare tax.

Box 7 is the amount of additional tips you reported to your employer, besides your normal wage.

Box 8 lists any other tips, like pooled tips for all employees, that your employer reported. 

Box 9 is a verification code for an IRS pilot program. This might be blank if they aren’t participating.

Box 10 lists the amount of dependent care you alotted.

Box 11 is any amount your employer paid you from a nonqualified deferred compensation plan. 

Box 12 is for your employer to list any codes that need to be applied, like sick pay.

Box 13 has three boxes:

  • Statutory employee status, which lists your earnings subject to Social Security and Medicare, but not federal income tax
  • Retirement, if you contributed to a 401(k) plan
  • Third-party sick pay, meaning you received additional pay from a third party like insurance

Box 14 gives your employer a place to report anything that doesn’t fit elsewhere. 

Boxes 15 to 20 are for state and local income tax reported by your employer. 

Now You Know How to Read a W2!

Understanding how to read a W2 means you’ll be able to spot any discrepancies and report them to your employer before filing your taxes when they could be a bigger issue.

Looking for more helpful articles? Check out the rest of the information on this site!

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