What is a W-2 form used for?

A W-2 form is used to report an employee's annual wages and the amount of taxes withheld from their paycheck. Employers are required to provide this form to their employees by the end of January each year, detailing the total earnings received, Social Security and Medicare taxes withheld, as well as federal, state, and local taxes that have been deducted. This information is critical for individuals when completing their income tax returns, as it ensures accurate reporting of income and tax obligations. Understanding how to read a W-2 is essential for managing personal finances and ensuring compliance with tax requirements.