Definition
The W-2 (Wage and Tax Statement) is the form your employer must send you by January 31 each year, summarizing your total wages and all taxes withheld during the previous calendar year. The IRS also receives a copy directly from your employer.
Box 1 shows your taxable wages. Box 2 shows federal income tax withheld — the figure that appears on your tax return as taxes already paid. Boxes 3–6 cover Social Security and Medicare (FICA) wages and withholding. Additional boxes report state and local tax information.
Your W-2 is the document that closes the loop on your W-4: it shows whether your withholding instructions resulted in enough taxes being paid, too many (triggering a refund), or too few (triggering a balance due).
How this affects your W-4
When you receive your W-2, Box 2 tells you exactly how much federal tax was withheld for the year. Comparing that figure to your actual tax liability (from your Form 1040) tells you whether your current W-4 settings are accurate.
If Box 2 is consistently higher or lower than your tax liability by a significant amount, update your W-4 using this calculator to avoid the same result next year.
See how w-2 form affects your withholding
Use the free W-4 calculator to calculate your exact withholding with your specific situation.
Open the W-4 Calculator →Read the guide
W-4 vs. W-2: What’s the Difference?
The W-4 sets your withholding; the W-2 reports it. How they connect and how to use your W-2 to fix your W-4.
Tax Refund vs. Adjusting Your W-4: How to Keep More Money Every Paycheck
The average refund is $3,100 — that's money that was yours all year. Here's how to decide whether a big refund is working for you or against you.
Related terms
Withholding
Taxes your employer takes out of each paycheck and sends to the IRS and your state before you receive your pay.
Tax Refund
Money the IRS returns to you when your withholding exceeds your actual tax liability for the year.
Balance Due
The amount you owe the IRS when your withholding was less than your actual tax liability.