Which statement is true about W-2 forms?

Which statement is true about W-2 forms?

• A. They show how much has been earned and how much was withheld for taxes
• B. They show investment income
• C. They are issued to self-employed individuals
• D. They indicate future tax liability

Answer: (A)

W-2 forms focus on what you earned as an employee and what was withheld for taxes. They’re issued by an employer to you at year’s end and show your total wages, tips, and other compensation, along with federal, Social Security, and Medicare taxes that were withheld (and often state or local taxes). This information is what you use to file your tax return and determine whether you owe more or get a refund. This form does not report investment income—that’s handled by other forms like 1099-INT or 1099-DIV. It isn’t issued to self-employed individuals, who typically use forms such as 1099-NEC and report income on Schedule C. And it doesn’t indicate future tax liability; it reflects past earnings and withholdings, which you use to compute what you owe on your return.

W-2 forms focus on what you earned as an employee and what was withheld for taxes. They’re issued by an employer to you at year’s end and show your total wages, tips, and other compensation, along with federal, Social Security, and Medicare taxes that were withheld (and often state or local taxes). This information is what you use to file your tax return and determine whether you owe more or get a refund.

This form does not report investment income—that’s handled by other forms like 1099-INT or 1099-DIV. It isn’t issued to self-employed individuals, who typically use forms such as 1099-NEC and report income on Schedule C. And it doesn’t indicate future tax liability; it reflects past earnings and withholdings, which you use to compute what you owe on your return.