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Simple English definitions for legal terms
W-2 form
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A quick definition of W-2 form:
Term: W-2 form
Definition: The W-2 form is a document that your employer gives you every year that shows how much money you earned, how much tax was taken out of your paycheck, and other important information about your job. You need this form to file your taxes and get any refunds you might be owed. Your employer has to give you a W-2 form if they paid you $600 or more during the year.
A more thorough explanation:
The W-2 form is a document provided by an employer to their employees that reports important information about their income and taxes withheld for the previous calendar year. This form is used by employees to prepare their tax returns.
Employers are required to file a W-2 form for any employee who received non-cash payments of $600 or more for services rendered.
John works for XYZ Company and earned a salary of $50,000 in 2021. His employer provided him with a W-2 form that shows his total income, the amount of taxes withheld from his paychecks, and any benefits he received. John will use this information to file his tax return for the year.
Another example is if an employee received a bonus of $700 in the previous year, their employer would need to file a W-2 form for that employee.
These examples illustrate how the W-2 form is used to report an employee's income and taxes withheld for the previous year. It is an important document that helps employees accurately file their tax returns.