What information does Form W-2 provide?

What information does Form W-2 provide?

• A. A summary of all bank transactions
• B. Details of money withheld for taxes by an employer
• C. A record of outstanding loans
• D. A report of credit card activity

Answer: (B)

Form W-2 serves as an essential document for employees in the United States, detailing the income earned during the tax year and the amounts withheld for federal and state taxes. It is issued by employers and provides important information necessary for employees to file their annual tax returns accurately. This form includes not only the total wages paid to the employee but also itemizes the total federal, state, and other taxes withheld from their paychecks throughout the year. This information is critical for understanding one's tax obligations and ensuring that the correct amount has been withheld, which could affect any potential refund or payment due at tax time. In contrast, the other options mentioned do not relate to the purpose of Form W-2. Summaries of bank transactions or reports of credit card activity pertain to financial transactions and accounts, while records of outstanding loans are not relevant to employment income or tax withholding. Thus, the correct choice highlights the specific focus of Form W-2 on tax-related information provided by employers.

Form W-2 serves as an essential document for employees in the United States, detailing the income earned during the tax year and the amounts withheld for federal and state taxes. It is issued by employers and provides important information necessary for employees to file their annual tax returns accurately.

This form includes not only the total wages paid to the employee but also itemizes the total federal, state, and other taxes withheld from their paychecks throughout the year. This information is critical for understanding one's tax obligations and ensuring that the correct amount has been withheld, which could affect any potential refund or payment due at tax time.

In contrast, the other options mentioned do not relate to the purpose of Form W-2. Summaries of bank transactions or reports of credit card activity pertain to financial transactions and accounts, while records of outstanding loans are not relevant to employment income or tax withholding. Thus, the correct choice highlights the specific focus of Form W-2 on tax-related information provided by employers.