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W-2

Tax

Wage and Tax Statement

The annual form an employer sends each employee showing total wages paid and taxes withheld during the year. You need it to file a federal tax return.

Definition

A W-2 is the wage statement your employer is legally required to send you each year, reporting how much you earned and how much was withheld for federal, state, and payroll taxes. It's the single most important document for filing a US tax return if you're a salaried or hourly employee.

Unlike a 1099, which reports gross payments with no tax withheld, a W-2 shows taxes already taken out throughout the year. That's why W-2 employees typically owe less (or get a refund) at filing time compared to 1099 contractors who have to set aside their own tax payments.

Every employer you worked for during the year sends a separate W-2, and you need all of them to file an accurate return. The Federal Income Tax Calculator uses your Box 1 wages as the starting point for computing what you owe.

Formula

There's no calculation to perform, a W-2 is a reporting document, not a formula. The key relationship worth knowing:

Box 1 (Taxable Wages) = Gross Pay − Pre-Tax Deductions (401(k), HSA, health premiums)

Worked Example

Dana earned $72,000 in gross salary in 2026 and contributed $6,000 to her 401(k) plus $1,500 to an HSA through payroll.

  • Box 1 (taxable wages): $72,000 − $6,000 − $1,500 = $64,500
  • Box 2 (federal tax withheld): roughly $7,800, based on her W-4 elections
  • Box 3 (Social Security wages): $73,500, since 401(k) contributions don't reduce Social Security wages the same way

Dana's tax return starts from the $64,500 figure, not her $72,000 gross salary.

Key Things to Know

  • One W-2 per employer, not per job title. If you changed roles within the same company, you still get one W-2 covering the full year at that employer.
  • Boxes 3 and 5 differ from Box 1. Social Security and Medicare wages (Boxes 3 and 5) don't get reduced by 401(k) contributions the way Box 1 does, since retirement deferrals still count toward payroll tax.
  • State wages can differ from federal wages. If you moved states mid-year or work in a state with different pre-tax deduction rules, Box 16 (state wages) may not match Box 1.
  • A corrected W-2 is called a W-2c. If your employer catches an error after issuing the original, they'll send a W-2c, and you should use that version when filing.
  • Missing withholding usually means a bigger bill in April. If Box 2 looks low relative to your income, check your W-4 elections with your employer before the next paycheck, not after you file.

Related Calculators

Federal Income Tax Calculator →Calculate your 2024 US federal income tax owed, effective rate, and marginal bracket by filing status, with standard or itemized deductions.
Tax Refund Estimator →Estimate your 2024 federal tax refund or amount owed based on income, filing status, deductions, and federal withholding — under 60 seconds.
Payroll Tax Calculator →Calculate how much federal income tax, Social Security, and Medicare is withheld from each paycheck. See your net take-home pay by filing status in seconds.

Related Terms

1099Information Return (Non-Wage Income)

Frequently Asked Questions

When should I receive my W-2?
Employers must mail or make W-2s available by January 31 for the prior tax year. If you worked more than one job during the year, expect a separate W-2 from each employer, not a combined one.
What's the difference between a W-2 and a 1099?
A W-2 covers wage income where the employer withholds taxes throughout the year and pays half of your Social Security and Medicare taxes. A [1099](/glossary/1099/) covers contractor or freelance income with no withholding, so the full tax bill, including self-employment tax, lands on you at filing time.
What do Box 1 and Box 2 on a W-2 mean?
Box 1 shows your taxable wages for the year, after pre-tax deductions like 401(k) contributions are subtracted. Box 2 shows the federal income tax your employer already withheld and sent to the IRS on your behalf, which reduces what you owe (or increases your refund) when you file.
Can I file taxes without a W-2?
You need the information from it, but if it's lost or never arrived, use Form 4852 as a substitute based on your final pay stub. Contact your employer first though, since a duplicate W-2 is usually faster than filing a substitute form.
Why don't my W-2 wages match my final paycheck's gross pay?
Box 1 wages are reduced by pre-tax benefits like 401(k) contributions, health insurance premiums, and HSA deposits. Your gross pay for the year and your W-2 Box 1 figure will differ by roughly the total of those pre-tax deductions.