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Why W-2 Files are Crucial

A W-2 form is a vital part for people’s tax preparation because this will report wages being paid and taxes which are withheld by employers in a course of a year. One of the best advantage of it compared to other tax-related forms would be on the fact that there’s no need for you to fill out a W-2 form. You could actually just receive it and use it.

One of the things which you should know is that you are actually not the only one that the employer prepares the W-2 form. The Social Security Administration, you as well as the IRS will actually acquire a copy of it, which would be unwise if you are planning to under-report your wage or when you over-report your taxes withheld. You should be aware that you can expect a W-2 form if you are actually an employee and likewise earned a particular amount or more or if you ever have an any amount you have withheld. When you are earning money as an independent contractor, you could in fact expect a 1099 form compared to a W-2 from an employer as long you made more than their specified or particular amount.

If you will get a W-2 form which the employer needs you to send in January 31, you will actually acquire multiple copies of it. This is so you could keep one as your record and include a copy with the federal tax return and your local, city or your state tax return.

It is very important that you do reviews on your W-2 form in order to make sure that the information is correct. In case your name is misspelled or your Social Security number is wrong or when this is missing, the IRS will be having problems on matching up the records on what you earned and paid on what you are reporting. It could delay the processing of your return as well as trigger an audit.

Why is it Important?

You actually are aware that those that are self-employed should make estimated tax payments throughout the year as well as assume that unlike it, there’s really no need to pay your taxes until April 15. This however is not the case. This is the reason why employees will also make regular tax payments throughout the year. This actually is what happens if the employer withholds taxes from your paycheck. They are in fact withheld and will be sent to the IRS.

This in fact is the reason as to why you should take care and understand your W-2 form because it will help you know if you are going to get a tax refund check on that year as well as on how big it’s going to be.
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