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Stay Prepared for Tax Season with These W-2 Tips

As the tax season approaches, employees need to be proactive about their Form W-2, Wage and Tax Statement. The 2024 W-2 forms must be provided to employees by January 31, 2025. It’s essential not just to file these documents away but to understand what they represent. PayrollOrg has outlined five critical tips to guide you through this process.

1. Verify Your Personal Information

Before diving into the details of your W-2, take a moment to check that all your personal information is accurate. This includes your name, address, and social security number. Any discrepancies can lead to delays in tax return processing, which could complicate your financial situation. If you spot any errors, it’s crucial to contact your payroll department immediately to correct this information.

2. Understand Contributions and Deductions

It's important to pay close attention to your contributions and deductions as outlined in various boxes on the W-2:

• - Box 1: This should reflect your taxable income, adjusted for any contributions to 401(k) programs or similar employer-sponsored plans. If you see a significant difference between this box and your year-to-date gross pay, it's worth investigating.
• - Box 3: This number should not exceed the 2024 social security wage base of $168,600. Double-check here to ensure everything aligns correctly.
• - Boxes 1, 3, and 5: If you’ve made any pre-tax contributions, such as for health insurance or transit benefits, remember that these amounts also differ from what you see on your paystubs.

3. Look Out for Multiple Forms W-2

If you held jobs with multiple employers during the last year, expect to receive a W-2 from each one. If by February 5 you haven’t received all of them, reach out to your previous employers' payroll departments to request a reissued statement. All W-2s are essential for accurately calculating your taxes, so don’t overlook this step.

4. Review Potential Tax Credits

Many employees may qualify for tax credits that can significantly impact their tax return. A perfect example is the Earned Income Tax Credit (EITC). Check the back of your W-2 Copy B to determine eligibility or visit IRS.gov/EITC for further guidance. This could mean savings worth thousands of dollars.

5. Avoid Overpaying Your Taxes

If you receive a tax refund that exceeds your expectations, it may be wise to update your Form W-4, Employee's Withholding Certificate. Adjusting your W-4 allows for less withholding, which can increase your take-home pay. Consider using the IRS's Tax Withholding Estimator tool to conduct a paycheck checkup and ensure you’re not paying too much in taxes throughout the year.

In conclusion, preparing for tax season starts with understanding your W-2 Form. Following these five tips can significantly ease your filing process and help maximize your return. For any questions or assistance, do not hesitate to contact your payroll department. Additionally, for more insights and resources, visit PayrollOrg's website at www.payroll.org.