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What to Do After You Receive Your W-2

US News & World Report -  Money logo US News & World Report - Money 1/21/2022 Geoff Williams
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Chances are, you've received your W-2 tax form or will soon. The official deadline for employers to distribute this tax document is Jan. 31. Taxpayers may not have their W-2 on Jan. 31, but it must be in the mail no later than that day.

If you haven’t received your W-2 by mid-February, you’ll definitely want to alert your employer.

W-2 forms, also known as a wage and tax statement, are used by employers to report their employees' annual wages as well as any federal state and local taxes withheld from their paychecks. Tax regulators need these forms to make sure that employees' reported income matches their reported earnings from employers.

Now that you have your W-2 in hand, you may be ready to file your taxes. We'll walk you through your next steps and address common questions about W-2s and issues that may come up.

1. Look for Errors.

Your W-2 form may look official and completely fine, but it could contain a mistake. Your name might be misspelled. Your Social Security number could be missing a digit. It's also worth checking to make sure your withholding amounts are correct.

"Once you get your W-2, it's a good idea to check it against your last pay stub, specifically making sure that your withholding amounts match what is reported on the W-2," says Chelsea Rebeck, a tax attorney and certified public accountant based in Walled Lake, Michigan.

2. Look for More Than One W-2.

If you've been working for the same company for years, you can skip this step. But if you changed jobs or took on part-time or seasonal work in 2021, you may receive more than one W-2.

"Many people who work multiple jobs during the year forget that they will receive a W-2 from one or more of their short-term jobs," Rebeck says. "Once the return is filed, the only way to fix this is to amend the return. Double-check that you have all of your W-2s before you file so that you can avoid the headache of amending (your tax return)."

3. Start Organizing Your Taxes.

Once your W-2 arrives, find a place to safely store what may soon become a significant pile of paperwork, Rebeck advises.

"You should also start a file with all your tax documents so that they are readily available once you are ready to start your return. Electronic storage is a great option for this," Rebeck says.

Electronic storage involves scanning your documents and then transferring them to a USB flash drive, CD or external storage drive. You could also store your tax documents on cloud services such as Dropbox or Google Drive.

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Beyond forms like your W-2 or possibly Form 1099-NEC (which you'll receive if you worked as a freelancer or did contract work), designate a place for documents containing your family’s Social Security numbers, any correspondence from the IRS, unemployment income information (if you had any in 2021) such as Form 1099-G, retirement income information and even the previous year's tax return.

4. Prepare Your Taxes.

At some point, you'll either file your taxes yourself, potentially using tax preparation software, including free online options, or you'll want to hire a professional tax preparer.

With any of those options, you'll need the information on your W-2 to file your taxes properly. If you use an online tax preparation service, you may upload your W-2 to a website or software program.

What if My W-2 Information Is Wrong?

That depends. Is it early in the tax season, or are you only a few days away from the tax filing deadline?

If it’s early and you spot an error, ask your employer to issue you a corrected Form W-2. Once you get that, you can continue where you left off and prepare your taxes. You’ll be doing yourself a favor since a mistake on your tax form could delay a refund.

If it’s late in the season, "contact your human resources administrator and explain to them what the error is and request a new W-2. Then, contact the IRS and explain your situation," says Daniel Hill, a certified financial planner and president of D.R. Hill Wealth Strategies LLC in Richmond, Virginia.

After that, Hill says, you should continue filing using Form 4852, a substitute for Form W-2.

What if My Employer Did Not Withhold Income/Social Security/Medicare Taxes?

This may not be good. You may learn that you owe a year's worth of taxes – that you now have to pay.

It should be noted that if you are an independent contractor who receives 1099 forms, your income won't be withheld. This is normal, and it's your responsibility to make estimated payments of what you believe you owe throughout the year to the IRS.

But let's say that your employer made an innocent mistake and didn't withhold your taxes. "If you don't have federal withholding on your W-2, prepare and update a W-4 immediately," Rebeck advises.

The W-4 is a tax form you should have filled out when you were initially hired. It lets your employer know how much money to take from your paycheck for federal income taxes.

"Once your W-2 comes, there isn't much you can do (about your tax bill), but fixing your withholdings will help for future years," Rebeck says.

If I Earned Under $600 From a Company, Will I Receive a W-2?

You should receive a W-2 from a company if it paid you at least $600 during the tax year.

"If you earned less than $600 with an employer, then you do not have to have withholding, but you need to file a Form W-4 that indicates you are exempt from withholding," says Paul Joseph, an attorney and CPA and founder of Joseph & Joseph Tax & Payroll in Williamston, Michigan. "However, you should be aware that even though you may be exempt from withholding income taxes, you still have to pay Social Security tax and Medicare."

What if My Employer Did Not Send Me a W-2?

If your employer did not send you a W-2, "obtain a Form 4852 from the IRS website and use the information from your last paycheck to fill out this form as a substitute W-2," Joseph says.

Hill also points out that if you didn't get a W-2, someone else may have received it. "Contact your human resources administrator and ask when it was mailed," Hill says. "If you opted for a paper W-2, double-check the address of where it was sent."

Copyright 2022 U.S. News & World Report


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