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A W-2 form is a wage and tax statement that must be prepared by employers. The main purpose of the W-2 form is to show the total taxable wages (including tips or other types of compensation) earned by the employee, as well as any income tax, social security, and medicare tax withheld by the employer on behalf of the employee. Other earnings and benefits, including non-qualified deferred compensation plan distribution (i.e. 457 plan), dependent care benefits, or advance EIC payments, are also reported in the W-2 form. Federal, state, and local wages and tax withheld are shown separately in the W-2 form. The employer needs to prepare at least 8 copies of the W-2 form for each employee.

If you are the employer:
You will need Copy A, Copy D, and 2 copies of Copy 1 of the W-2.
Copy A of the W-2 needs to be filed with the Social Security Administration, typically by March 1st.
Copy 1 of the W-2 is to be filed with states and/or local tax office, as needed.
Copy D is for the employer's record.

If you are the employee:
Each employer is required to send each employee four copies of their W-2: Copy B, Copy C, and two copies of Copy 2. Those W-2 forms are typically sent by January 31st of the year following the tax year.
Copy B of the W-2 is to be filed with the employee's federal tax return.
Copy C of the W-2 should be retained by the employee. Note that although the IRS requires that every employee keeps Copy C of their W-2 for a minimum of three years, they recommend retaining the W-2 until you receive social security benefits. This would help clear up any discrepency that may occur between wages recorded by Social Security Administration and your records at the time you become eligibel to receive your social security benefits.
Copy 2 should be filed with the employee's state, city or local income tax return.

Note that if you are self-employed, your income will be reported on 1099-MISC not a W-2 form. W-2 form is also referred to as simply W2.

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