What Is a W-2 Form?
Your W-2 (Wage and Tax Statement) is the most important document you receive at tax time. Issued by your employer, it summarizes your annual earnings and the taxes withheld from your paychecks throughout the year. Every employer must send W-2s by January 31 for the prior tax year.
Breaking Down Each Box
| Box | What It Shows | Why It Matters |
|---|---|---|
| Box 1 | Wages, tips, other compensation | Your taxable wages — what you report as income on your federal return |
| Box 2 | Federal income tax withheld | The amount your employer sent to the IRS on your behalf — credited against your tax bill |
| Box 3 | Social Security wages | Earnings subject to Social Security tax (max $168,600 for 2025) |
| Box 4 | Social Security tax withheld | 6.2% of Box 3 wages — verifies correct withholding |
| Box 5 | Medicare wages | All wages subject to Medicare tax (no cap) |
| Box 6 | Medicare tax withheld | 1.45% (plus 0.9% additional Medicare tax over $200K) |
| Box 12 | Deferred compensation, HSA, etc. | Important for 401(k) contributions, health savings accounts, and other pre-tax benefits |
| Box 16-17 | State wages and state tax withheld | For state tax returns — Texas has no state income tax so this may be blank |
Why Box 2 Is Critical for Your Refund
The amount in Box 2 (Federal Income Tax Withheld) is what your employer already paid the IRS for you. If this amount exceeds your actual tax liability, you get a refund. If it falls short, you owe the difference.
Texas Note
As a Texas resident, Box 15 (State) will show "TX" and Boxes 16-17 may be blank or show $0 — that's correct! Texas has no state income tax, so no state taxes are withheld from your paycheck.
Multiple W-2s?
If you worked multiple jobs, each employer sends a separate W-2. Add together all Box 1 amounts when calculating your total income. All Box 2 amounts combine to determine your total federal withholding.