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Understanding your W-2

Everything you need to know about the W-2 form.

Understanding your W-2

Form W-2 Overview

Form W-2 is the annual "Wage and Tax Statement" that reports the taxable income you earned from an employer to you and to the Internal Revenue Service (IRS). The form also includes taxes withheld from your pay, such as Social Security and Medicare.

All these taxes are withheld from your pay and submitted to federal and state taxing authorities on your behalf. Multiple boxes appear on the form, each citing a certain portion of your earnings and withholding. Each box is labeled, but understanding what each of these notations means can make the process of correctly transferring the information to your tax return much easier.

Understanding your W-2

How to read and understand your W-2

What the lettered boxes mean

Form W-2 actually comes in a variety of sizes, shapes, and formats. What you'll see when you look at yours depends on how your employer processes payroll, but every Form W-2 contains the same information regardless.

Boxes A through F are all identifying information: your Social Security number, your employer's tax ID number or EIN, everyone's addresses, and their full legal names. Box D is a control number that identifies your unique Form W-2 document in your employer's records.

What the numbered boxes mean

The numbered boxes on Form W-2 record your financial information.

W-2 Box 1: reports your total taxable wages or salary. The number includes your wages, salary, tips you reported, bonuses, and other taxable compensation.4

Taxable fringe benefits such as group term life insurance are included here, but Box 1 does not include any pre-tax benefits such as savings contributions to a 401(k) plan, 403(b) plan, or health insurance.

W-2 Box 2: reports how much your employer withheld from your paychecks for federal i