Form W-2 holds information regarding the amount of taxes withheld from an employee’s paycheck during the past financial year, according to Intuit TurboTax. This information is vital in filing for federal and state taxes for the year. The employer files this form for withheld employee's taxes.
The information is in several sections on Form W-2, states Forbes. One such section shows the employee’s tips, wages, prizes and any other benefits. The next section holds the total amount of federal income taxes withheld during the tax period. Employers determine this information using Form W-4. The next part shows the total wages after Social Security tax. The amount of Social Security tax is in another section.
Form W-2 also shows the amount of Medicare taxes withheld for the year, notes Forbes. Calculation of Medicare taxes utilizes a flat rate. Another part of this form shows any tips that the employee reports to the employer during the year. The employer displays the benefits paid to the employee, including amounts that the employer pays from a nondisqualified deferred compensation plan.
Another section of this form holds identifying information, states Intuit TurboTax. This section contains the name of the employee and the Social Security number. The IRS uses this section to monitor tax behavior of the employee and make contact when necessary.