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Understanding W-2 Forms

The Form W-2 is used to report earned compensation including wages and salaries. The Form W-2 is explained below including frequently asked questions about W-2 forms and what you can and cannot do with the W-2 Form.

Why should we understand the W-2 Form?

To prepare your tax return correctly, it is important to understand the information shown in the various boxes of the tax form W-2.

Where to enter the W-2 Form information?

Most of the information on the W-2 form will be entered on line 7 of the tax form 1040. You enter the wages, salaries and tips shown in box 1 of the form W-2 on line 7 of the tax form 1040. Some amounts shown on the W-2 form will also have to be entered on line 7 of the 1040 form. Certain boxes contain amounts that may also have to be entered on the tax form 1040 but not on line 7.

You may have more than one W-2 form because you have more than one employer or because both you and your spouse (if married filing jointly) work. If you have more than one W-2 form, add the income from box 1 of each W-2 form and enter the total on line 7 of the 1040 tax form.

Do I have to enter every number on the W-2 Form onto the 1040 form?

No. Some information on the W-2 forms are unnecessary for tax return preparation.

Some boxes of the form W-2 give information about amounts that are included in Box 1 of W-2 form already and you generally do not enter the amounts in these boxes on form 1040. You use this additional information to figure adjustments, deductions and tax credits.

For example, box 14 may show the lease value of a vehicle provided to you by your employer. Other items reported here such as state disability insurance taxes withheld or union dues may be deductible on other forms of your tax return.

What happens if the information on my W-2 Form is incorrect?

If the wage information in box 1 of the Form W-2 is incorrect, your employer must issue Form W-2c called Corrected Wage and Tax Statement. Enter the information on the corrected Form W-2 on line 7 of the form 1040. You will need to attach both the Form W-2 and W-2c to your tax return and send to the IRS. Never correct wage information yourself.

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