Definition - What does W-2 mean?

A W-2 is a form sent by an employer to the Internal Revenue Service (IRS). It informs the IRS of the amount of money that has been withheld from an employee's salary over the previous year in order to pay taxes.

Insuranceopedia explains W-2

The tax cuts from an employee's salary that are included in a W-2 form include those paid to both state and federal governments. It also includes all manners of compensation, even tips paid to the employee by customers.

If the employer fills out a W-2 form in 2017, the details are for income earned in 2016. The IRS matches the information given in a W-2 form with the taxpayer's own tax returns. The IRS will then investigate any discrepancy between the tax returns and the information on the W-2 form.

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