Payroll
W-2
IRS form reporting wages, tips, and tax withholding for employees.
Form W-2 reports an employee's annual wages and the taxes withheld from their paychecks. Employers must furnish W-2s to employees and file with the Social Security Administration by January 31.
W-2 employees have payroll taxes (FICA, Medicare, federal and state income tax) withheld throughout the year. Employers pay the matching portion of FICA and Medicare on top.
Common pitfalls
- Misclassifying contractors as employees (or vice versa)
- Reporting incorrect amounts for fringe benefits, retirement contributions, or HSA contributions
- Missing the January 31 filing deadline triggers escalating penalties
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