SAN ANTONIO, Jan. 27, 2017 /PRNewswire/ -- Form W-2, Wage and Tax Statement, is a vital resource for determining employees' taxes and future social security benefits. To avoid burdensome tax penalties and to maximize your tax refund, it is important to review the form carefully.
The nation's leader in payroll education, the American Payroll Association, has five W-2 tips to ensure your W-2 is accurate this tax season.
1. Get your hands on all of your W-2s. If you received compensation from more than one company during 2016, you will need to obtain a W-2 from each business. If you haven't received your W-2 by February 3, contact the company's payroll department to request a 'reissued statement.'
Did you earn $600 or more from a single company for freelance or contract work? You need the Form 1099-MISC, Miscellaneous Income, instead of a W-2. You may be responsible for all taxes on those earnings.
2. Ensure your Social Security Number (SSN) matches your social security card. Your name and SSN on the W-2 must match your social security card to receive the social security benefits to which you are entitled. If they do not match, ask your payroll department for a corrected W-2.
3. Compare your W-2 to your final paystub.
Items to review on the W-2:
A. Box 1 will differ from your final 2016 paystub year-to-date gross pay if you participated in a 401(k) or other employer-sponsored savings plan.
B. The Box 3 total should not exceed $118,500 – the 2016 social security wage base.
C. Boxes 1, 3, and 5 will be different from your final 2016 paystub year-to-date gross pay if you use pre-tax dollars to pay insurance premiums or for transit benefits, or to contribute to flexible spending accounts.
4. Check for tax credits. Depending on your eligibility, you may qualify for thousands of dollars from the Earned Income Tax Credit. Read the back of the W-2 copy B, C, and 2 to determine your eligibility.
5. Put some money in your pocket! If you receive more than $1,000 in refunds adjust your Form W-4 to more closely match your tax liability. By updating this information, you could give yourself an instant raise.
For additional tips and resources, visit www.nationalpayrollweek.com.
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SOURCE American Payroll Association