In U.S. personal finance, Form W-2 reports an employee’s annual wages and federal tax withheld.
Employers generally prepare a W-2 for each employee and send copies to the worker and the Internal Revenue Service. The form can also report items such as Social Security wages, Medicare wages, and taxes withheld for those programs. Employees use its information when preparing a federal income-tax return.
A W-2 is different from Form 1099, which commonly reports certain nonemployee or investment income, and Form 1040, which is the individual federal income-tax return itself. The figures on a W-2 are not necessarily the same as take-home pay because deductions and withholding affect the paycheck. Employers may issue corrected W-2 forms when reported information changes.