W-2 Form: Everything You Need to Know in 2025

Introduction

The W-2 Form, also known as the Wage and Tax Statement, is one of the most important tax documents in the United States. It is used by employers to report employee earnings and taxes withheld throughout the year.

Whether you’re an employer, entrepreneur, or employee, understanding this form is essential for meeting tax obligations and avoiding penalties.

1. What Is the W-2 Form and What Is It For?

The W-2 Form is issued by employers to their employees to report:

• Gross wages earned during the tax year.
• Taxes withheld, including Social Security and Medicare.
• Contributions to retirement plans and other benefits.

Employees use this form to complete their tax returns. By law, it must be delivered by January 31 each year.

Who Needs to File It?

• Employers: If your business has employees, you are legally required to generate a W-2 for anyone who earned more than $600 in annual compensation.
• Employees: Workers must use the information provided on the W-2 to fill out their Form 1040 during tax season.

2. Key Information on the W-2 Form

The form contains critical details, such as:

• Employee Information: Name, address, and Social Security Number.
• Annual Wages: Total gross income earned by the employee.
• Taxes Withheld: Federal, state, and local taxes deducted from the paycheck.

3. Differences Between the W-2 Form and the 1099 Form

Although both forms report income, they serve different purposes:

• W-2 Form: Used for employees and reflects taxes withheld.
• 1099 Form: Used for independent contractors and does not include withheld taxes.

If you hire both employees and freelancers, ensure you issue the correct form. More details are available in our blog: 1099 Form: What It Is and How to File It.

4. How to File the W-2 Form

The W-2 Form must be sent to your employees and filed with the IRS and Social Security Administration. Here are the key steps:

1. Deliver to Employees: Ensure each employee receives a copy of their W-2 by January 31.
2. File with the IRS and Social Security: Submit the required copies via the Business Services Online (BSO) platform, the official employer system of the Social Security Administration.
3. Avoid Errors: Mistakes can lead to penalties. Verify salary and withholding details before submission.

Our team is here to assist you at every step, ensuring data accuracy and compliance with IRS and Social Security regulations. We handle the entire process so you can focus on growing your business.

5. Deadlines for Filing the W-2 Form in 2025

To avoid penalties, adhere to these deadlines:

• January 31, 2025: Deadline to deliver the W-2 to employees.
• January 31, 2025: Deadline to file physical copies with the IRS.

Check more important dates here: Tax Deadlines for 2025.

Penalties for Missing the W-2 Deadlines

Failing to meet deadlines can result in penalties ranging from $50 to $290 per form, depending on the delay. Fines may be higher if intentional negligence is proven.

Conclusion

The W-2 Form is an essential component of tax compliance in the United States. Both employers and employees must ensure its correct issuance and filing. If you need assistance managing your tax obligations, Prodezk’s expert team is here to guide you through every step of the process.

Learn more about optimizing your tax compliance here!

Other Related Topics You Might Be Interested In:

• Guide to Filing Business Taxes in the U.S.
• Tax Table for U.S. Businesses in 2025
• U.S. Tax Season 2025