What Is a W-2 and What Do You Do With It?

Every January you should receive a W-2 form from your employer. It contains information about your wages and the taxes withheld from your paychecks throughout the year. You need it to file your taxes. Here is what it is, what every box means, and what to do with it.

What a W-2 Is

A W-2 is a Wage and Tax Statement. Your employer is required to send it to you by January 31 each year for the prior tax year. If you worked for multiple employers, you receive a W-2 from each one.

The form has multiple copies: one for your federal return, one for your state return, and one for your records. Keep at least one copy for your records after filing.

The Key Boxes on Your W-2

Most people only need to understand a handful of boxes to file a straightforward tax return:

• Box 1 – Wages, tips, other compensation: Your total taxable wages for the year. This is the number you report as income on your federal tax return.
• Box 2 – Federal income tax withheld: How much was taken from your paychecks for federal income tax. Compare this to what you actually owe – the difference determines your refund or balance due.
• Box 3 – Social Security wages: Wages subject to Social Security tax (currently capped at $168,600 in 2026).
• Box 4 – Social Security tax withheld: 6.2% of Box 3. Your employer pays an equal amount.
• Box 5 – Medicare wages: Usually the same as Box 1 or higher. Medicare tax applies to all wages with no cap.
• Box 6 – Medicare tax withheld: 1.45% of Medicare wages.
• Box 12 – Various codes: Can include 401k contributions (Code D), health insurance premiums, and other compensation items.
• Box 16 – State wages: Your wages for state income tax purposes.
• Box 17 – State income tax withheld: How much was withheld for state taxes.

What To Do With Your W-2

When you receive your W-2, do three things:

1. Verify the information is correct. Check that your name, Social Security number, and employer information are accurate. Errors can cause problems with the IRS.
2. Keep it somewhere safe. You will need it to file your taxes. Most employers also provide an electronic version through their payroll system.
3. File your taxes. You can file online using free tools (see the next section) or work with a tax preparer. The deadline is typically April 15.

Free Ways to File Your Taxes

If your income is under $79,000 (2026 threshold), you can file your federal taxes for free through the IRS Free File program. Several software providers participate including TurboTax Free Edition, H&R Block Free, and others.

The IRS also offers Direct File – a free, government-run filing option available in most states for people with simple tax situations (W-2 income, standard deduction, common credits).

What If You Did Not Receive a W-2?

Employers are required to mail W-2s by January 31. If you have not received yours by mid-February:

• Check your employer’s HR or payroll portal – many companies now provide electronic W-2s
• Contact your HR department directly
• If you still cannot get it, contact the IRS at 800-829-1040 – they can contact your employer on your behalf

W-2 vs 1099

If you do any gig work, freelance, or contract work alongside your regular job, you may receive a 1099 form instead of a W-2. The key difference: W-2 workers have taxes withheld automatically. 1099 workers are responsible for setting aside and paying their own taxes, including the full 15.3% self-employment tax. If you receive a 1099 for any work, set aside 25-30% of that income for taxes.

The Bottom Line

Your W-2 is a straightforward document once you know what the boxes mean. Check it for accuracy when it arrives, use it to file your taxes before April 15, and keep a copy for your records. If your tax situation is simple – one or two W-2s, standard deduction, no investments – you can almost certainly file for free online in under an hour.