Taxpayers should receive a Form W-2 from each employer shortly after the close of each tax year. The W-2 is used by taxpayers to enter various dollar amounts into the Form 1040 (or other, less-used Forms) for income tax calculation. Typical values transferred from the W-2 to the Form 1040 include:
-Wages, tips, other compensation (W-2, box 1; Form 1040, Line 7)
-Federal Income tax withheld (W-2, box 2; Form 1040, Line 62)
-Allocated tips (W-2, box 8; Form 1040, Line 7)
-Gambling Winnings (W-2G, box 1; Form 1040, Line 7)
Form W-2 includes other important information. Social Security tax withheld (box 4) and Medicare tax withheld (box 6) are also shown on the W-2, but are both unrecoverable; both withheld amounts are fully used to fund their respective government programs. Boxes 16-19 are used for calculating state and local taxes.
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