Once a year, Americans struggle to work out how to put together their W2 tax returns, and the IRS has little patience for those that don’t get it right
In the US, employed individuals must complete a W2 tax form and submit it to the IRS at the end of each tax year, which is usually January 31.
Known as an Employee Wage and Tax Statement, the W2 tax form is essentially an income statement that lists an individual’s total earnings and tax deductions for that calendar year. Figures are broken down into categories such as wages and tips, Medicare and social security payments, retirement plan payments and so on. The W2 basically allows the tax authorities to see, at a glance, how much an individual has earned as gross income in the course of the tax year, as well as how much tax was deducted from their earnings by their employer. This enables them to calculate whether the individual has paid too little or too much tax.
The employee submits a copy of the W2 to the IRS, along with a tax return, whilst the employer should send a second copy to the local tax office. If an individual has more than one job during the course of that tax year, then they may have multiple W2 forms, all of which should be attached as proof of earnings and submitted with that person’s income tax form.
A W2 tax form is usually supplied by an employer or former employer and is a legal requirement on their part to do so. However, on occasions, people run into problems obtaining an accurate W2 form. Common scenarios that create administrative headaches for individuals include having to track down a missing W2 form from a former employer, lost or late W2 forms or failure on the part of an employer to supply a form at all.
In the case of missing W2 forms, there may be several reasons why such situations occur. Sometimes the employee’s address details are out of date or the employer’s accounts department simply runs behind schedule. In most instances, if the individual’s local IRS department is informed that a particular W2 is delayed, the tax office will usually be understanding. In such cases, the individual should contact their employer and simply request that a second copy be sent out to them. Occasionally an employer will insist on charging an administration fee for this, particularly if they use an outside company to administer their taxes or HR functions. However, this is usually fairly nominal and worth paying to avoid any further hassle.
Occasionally, however, motives may be more sinister. Sometimes the business in question may have gone into administration and all work has simply ceased or it may transpire that a company has not been deducting the correct amount of tax or social security from a worker’s wage packet. Provided that the individual concerned is able to prove that they have done everything possible to obtain their W2 form, the IRS will usually allow them to provide an estimate of earnings whilst also taking up the matter on behalf of the employee by contacting the employer themselves.