Filing your taxes on your own comes with plenty of benefits. Online tax filing programs are affordable and accessible, and can walk you through the filing process.
But taking tax filing into your own hands means you need to do a little extra preparation to make sure all of the information you collect and enter is correct. For individuals working for an employer, a big part of that means verifying that your W-2 tax form is accurate.
What is the W-2 tax form?
If you're a company employee, you'll get a W-2 tax form each year. Also called a Wage and Tax Statement, employers are required by law to send this form to all employees. Many employers let you sign up to receive your W-2 online. Otherwise, expect to receive it at the last address your workplace has on file. Think of your W-2 as a messenger between your employer and the IRS. It's a report that shows how much money you made in a specific tax year, how much your employer withheld for state and federal taxes, as well as any other tax-deductible benefits.
How to verify your W-2
As soon as you get your W-2, you should take a few minutes to verify that all of the information included is correct. To verify your W-2, you will need to reference your last paycheck of the tax year. The tax year for 2020 runs from January 1, 2020-December 31, 2020.
Your income is taxed based on when you receive your paycheck. You'll want your last paycheck for hours worked through the end of the year, even if you don’t receive that paycheck until January.
There are three easy steps to make sure your W-2 is correct:
- Check the spelling of your name. No nicknames here — you'll want to ensure your full name is spelled out.
- Verify that your social security number is listed correctly.
- Double-check that your taxable wages are correct.
Most common W-2 errors
Most W-2 errors come from typos and misread forms or from simply forgetting to update your workplace with new information. Whatever the reason is, making sure your form is free of errors is one of the best tax filing tips you can start with once you receive your form.
These are the most common errors found on W-2 forms:
Incorrectly reported social security number
- Why it matters: Your social security number is what ties all of your taxes paid to you. When it's wrong, it could have negative consequences down the line if you ever apply for government programs like retirement, disability, or survivor’s benefits.
Misspelled or incorrect name:
- Why it matters: If your name and social security number don't match, it could raise red flags with the IRS. In some cases, a mismatched name and social security number can mean incorrectly reported tax information.
Taxable income reported incorrectly
- Why it matters: This information needs to be reported correctly for you to pay the right amount of taxes. Since this is all tied to your social security number, this will affect benefits you might qualify for down the line.
- Why it matters: If you can get your W-2 online, you may use your W-2 with an old address on it. However, if you rely on the post office to get your W-2, you'll want this corrected ASAP since the post office can't forward federal tax documents to your new address. Instead, your W-2 will be returned to your workplace. If the only thing wrong with your W-2 is your address is listed incorrectly, you won't need a corrected version. That's because the address is mainly used for mailing purposes. However, it's still a good idea to update your workplace with your address, so let them know as quickly as you can to make sure it's taken care of.
Correcting W-2 errors
As soon as you spot an error on your W-2 tax form, you should contact your employer.
Remember that even when communicating with your workplace, you need to be careful about sensitive information. You should never send a copy of your W-2 or information about your social security number over regular email for your own security. Instead, give the relevant office a call to discuss the issue. Your employer will advise you on the best way to communicate sensitive information, like a corrected social security number, and how to confirm your identity securely.
Once your employer is aware of the error on the form, they should provide you with a corrected W-2 form, which is called a W-2C, to file your taxes. You'll need the original and the corrected version when you file.
Why verifying your W-2 is important
The IRS doesn't just rely on information that you report on your tax return. Your employer also files its own form with the IRS reporting the same information on your W-2. This means if there's an error on your W-2, there's an error in your employer's filing as well. Having a W-2 with an incorrect social security number, name, or taxable wages could cause issues with a delayed tax return or lead to an IRS tax audit.