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A W-2 Form is a document an employer sends to each employee and the IRS at the end of the year, showing the employee's total wages and taxes withheld.
In Depth
Employers use the W-2 Form, officially called the 'Wage and Tax Statement,' to report the income paid to employees and the federal, state, and local taxes withheld from their paychecks during the year. You need this form to file your annual income tax return, as it shows how much you earned and how much tax has already been paid on your behalf. Employers are required to send W-2 Forms to employees by January 31st each year.
Example
When preparing her taxes, Sarah used the information from her W-2 Form to report her income and the amount of federal income tax her employer had already withheld.