SAN ANTONIO, Jan. 21, 2015 /PRNewswire/ -- Form W-2, Wage and Tax Statement, is the document employees recognize as vital to complete their income taxes. Not only is Form W-2 important for your immediate financial situation, but it is also vital to future social security benefits.
Companies are required to deliver W-2 forms to employees by February 2, 2015. To avoid suffering tax penalties and to maximize your tax refund, you should review this document carefully.
The American Payroll Association, the nation's leader in payroll education, has five simple tips to get the most out of your Form W-2 and ensure it's accurate.
1. Give yourself an instant raise! The average person overpays their taxes by $250 a month. If you are getting a refund of more than $1,000, you should download the free Paycheck Maximizer smartphone app (http://www.nationalpayrollweek.com/edu_w4.cfm) to adjust your Form W-4 to closer match your tax liability. You will increase the money you receive in each paycheck.
2. Verify you have received all of your W-2s. You should receive a W-2 form from every company you received compensation from during 2014. If you do not receive one within a few days after February 2 (allow time for the form to reach you by mail), contact the company's payroll department and request a 'reissued statement.'
If you earned $600 or more from a single company for freelance or contract work, you should receive Form 1099-MISC, Miscellaneous Income, instead of Form W-2. You are solely responsible for all taxes on that income.
3. Verify your Social Security Number (SSN) matches your social security card. The name and SSN on Form W-2 must match your social security card in order for you to receive your social security benefits. Ask your payroll department for a corrected Form W-2, if needed.
4. Review your Form W-2 against your final 2014 paystub. Contact your payroll department immediately if you notice any discrepancies.
Important items to review on Form W-2:
A. Box 1 will differ from your final 2014 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 $117,000 – the 2014 social security wage base.
C. Boxes 1, 3, and 5 will be different from your final 2014 paystub year-to-date gross pay if you use pre-tax dollars to pay insurance premiums or to contribute to flexible spending accounts.
5. 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 Form W-2 copies B, C, and 2 to determine your eligibility.
For additional tips and resources or to download the Paycheck Maximizer app, visit www.nationalpayrollweek.com.
SOURCE American Payroll Association