What is the purpose of a W-2?

A W-2 form is used in the United States to report an employee's annual wages and the amount of taxes withheld from their paycheck. Employers are required to provide this form to employees by January 31 each year, enabling employees to accurately file their income tax returns. The W-2 includes information on earnings, Social Security, and Medicare contributions, as well as federal and state tax withholdings. It serves as an essential document for both tax reporting and compliance purposes.