Understanding W-2 Forms

The W-2 form impacts my understanding of income and taxes by:

• Providing a summary of my earnings and taxes withheld

• Offering investment advice

• Listing all my expenses

• Calculating my tax refund

A W-2 form is used for:

• Reporting employee's annual wages and taxes withheld

• Filing a tax return

• Applying for a loan

• Registering a business

Employers provide W-2 forms to their employees because:

• They are required by law to report employee earnings and taxes withheld.

• They want to give employees a summary of their benefits.

• They need to track employee attendance.

• They want to provide employees with a tax refund.

Identify the different boxes on a W-2 form and explain what information each box contains (e.g., wages, taxes withheld).

• Box 1: Wages, tips, other compensation; Box 2: Federal income tax withheld; Box 3: Social security wages

• Box 1: Federal income tax withheld; Box 2: Wages, tips, other compensation; Box 3: Social security wages

• Box 1: Social security wages; Box 2: Wages, tips, other compensation; Box 3: Federal income tax withheld

• Box 1: Wages, tips, other compensation; Box 2: Social security wages; Box 3: Federal income tax withheld

If your total earnings (Box 1) for the year are 50,000 and federal taxes withheld (Box 2) are 5,000, what percentage of your income went to federal taxes?

• 5%

• 10%

• 15%

• 20%

If an employee worked part-time and earned 20,000 with 2,000 withheld for state taxes, what would be their net income?

• 18,000

• 20,000

• 22,000

• 2,000

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Compare two W-2 forms for employees with different earnings. Discuss how their tax withholdings might differ.

• Employees with higher earnings will have higher tax withholdings.

• Employees with lower earnings will have higher tax withholdings.

• Tax withholdings are the same regardless of earnings.

• W-2 forms do not show tax withholdings.

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What steps should you take to file your taxes using your W-2 form?

• Gather your W-2 form, fill out your tax return, and submit it to the IRS.

• Ignore the W-2 form and file taxes using only bank statements.

• Submit your W-2 form directly to your employer.

• Wait until the IRS contacts you to file taxes.

Reviewing your W-2 for accuracy before filing taxes is important because:

• It ensures you pay the correct amount of taxes.

• It helps you avoid identity theft.

• It speeds up the refund process.

• It is required by law.

What does Box 1 of the W-2 represent?

• Social Security wages

• Total earnings

• Federal income tax withheld