What information does a W-2 form provide?

A W-2 form is an important tax document that employees receive from their employers at the end of the year. It summarizes an employee's total earnings and the amount of taxes withheld from their pay for that year.

One of the primary purposes of the W-2 is to document total tax deductions from paychecks, providing a breakdown that includes federal income tax, Social Security tax, and Medicare tax. This information is crucial for individuals when they file their annual tax returns, as it helps them report their income and the taxes that have already been withheld.

While total earnings for the year are also reported on a W-2, along with gross pay before deductions and net pay after deductions, the form specifically highlights the tax deductions taken from the employee's earnings, which is essential for accurately preparing tax returns.