Which tax form is issued to employees by their employer?

• A. W-2
• B. 1099
• C. 1040
• D. 941

Answer: (A)

The essential idea is that employees receive a year-end summary from their employer that shows how much they were paid and how much tax was withheld. This is the W-2. An employer provides a W-2 to each employee after the year ends, detailing total wages and tips, federal income tax withheld, Social Security and Medicare taxes, and often state and local tax information. The employee uses the W-2 to prepare their personal tax return, and the employer also sends a copy to the Social Security Administration as part of payroll reporting. Other forms exist for different purposes: a form issued to non-employees like contractors, the form individuals file to report their income, and a form the employer uses to report payroll taxes quarterly. In short, the W-2 is the employee-focused year-end statement issued by the employer.