What is the purpose of a W-2?It is used by the employer to withhold the proper amount of federal income tax from the employee’s paycheckW-2 reports the amount of federal, state and other taxes withheld from employee’s paycheckW-2 reports the amount of federal, state and other taxes withheld from subcontractor’s paycheckW-2 reports state income tax only
W-2 reports the amount of federal, state and other taxes withheld from employee’s paycheckExplanation:The IRS requires employers to report wage and salary information for employees on Form W-2. The W-2 also reports the amount of federal, state and other taxes withheld from employees paycheck. For an employee, the information on W-2 is extremely important when preparing tax returns.
The purpose of a W-2 is to provide employees with a summary of their earnings and withholdings for the year. Specifically, the W-2 reports the amount of wages paid to the employee, as well as the amount of federal, state, and other taxes that were withheld from their paycheck over the course of the year. This information is used by employees to file their annual income tax returns with the IRS and to calculate whether they owe additional taxes or are entitled to a refund. Additionally, the W-2 is used by the Social Security Administration to track an employee’s earnings and contributions to Social Security and Medicare. It is important for employers to provide accurate and timely W-2 statements to their employees, as failure to do so can result in penalties and fines from the IRS.
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