Features of W-2 Income Statement

A document that indicates employee's gross income and federal tax deductions produced annually by the employer is referred to as W-2 income statement. The due dates set by the federal government for the employers to ensure that the employees and the internal revenue service is usually 31st January every year. W-2 income statement clearly outlines the tax that is withheld from an employee by the revenue authority which is crucial when filing returns to the employees. The W-2 income statement acts as a guide to the internal revenue service usually refunds or taxes the employees less the amount withheld by the employer. Failure of the employer to avail the W-2 income statement to the employee and the internal revenue service subjects the employee to extra charges as this is considered as a default.

The statement also indicates earnings from social security and Medicare earning of the employee information used by the social security administration in verification of the employee's income tax returns to the internal revenue service. The W-2 income statement has several boxes each of them containing different information thus the employee finds it easy to read and understand the content of the document.This statement can therefore be used by the revenue authorities to proof that an employee is a genuine tax payer. In many occasions such as in lawsuits and application federal financial aid employees are required produce their W-2 income statement. What Does A W-2 Look Like?

It is the responsibility of every employee to file annual tax returns accompanied with a W-2 income statement as this makes it possible to audit the tax return easily. The internal revenue service staff appreciates the structure and the nature of information in the W-2 income statement as they are able to serve many taxpayers payers within a short time because it reduces the work load. Through the W-2 income statement employees can compare and contrast the information in the statement and that in their records and identify the difference in the figures if any. Personal information such as name, identification and pin numbers must of both the employee and the employer must be included in the W-2 income statement. The statement is structured in such a way that it features all types of income the employee is subjected to. Here are more related discussions about tax at http://www.dictionary.com/browse/taxation.

W-2 income statement is very important and should not be overlooked by the employees and the employers. Advanced information technology has facilitated easy transmission of the W-2 income statement from the employers to the employers and the internal revenue service through electronic means. Ignorance is no excuse thus employees should take an initiative to ensure that they clearly comprehend the W-2 income statement. How Does A W-2 Look?