What is the purpose of the IRS Form W-2?

The purpose of the IRS Form W-2 is to report an employee's annual wages and the amount of taxes withheld from those wages. Employers are required to complete this form for each employee they pay during the year and submit it to the IRS. The W-2 provides essential information that employees need when they file their income tax returns. It includes details such as total earnings for the year, Social Security wages, Medicare wages, and the total amount of federal, state, and local taxes withheld. This information is crucial for accurately determining the tax liability or refund an employee may receive when they file their taxes.

This function is distinct from other forms and purposes, such as those related to self-employment, tax refunds, or loan applications, which do not specifically represent the earnings and tax withholdings of employed individuals.