If you were employed during 2020, you should receive your Form W-2 (officially known as the Wage and Tax Statement) from your employer soon since employers are required to send them out by January 31, 2021 (but since January 31st falls on a Sunday this year they have until February 1, 2021). If you were self-employed or worked on a contract basis with no taxes withheld, your income may be reported to you on different tax forms: a 1099-NEC or 1099-K, which you should also see soon.
The Affordable Care Act requires employers to report the cost of offered employee insurance coverage under an employer-sponsored group health care plan on the W-2 they issue to you. That information will appear in Box 12 of your Form W-2, identified by the Code DD. But don’t worry – just because the information appears on your W-2 doesn’t mean it is taxable to you. These benefits have always been tax-free, and the information is there so you can better understand the cost of the health insurance benefit you receive through your employment.
Here are some tips for reviewing your W-2:
- Notify your employer if your social security number is wrong in Block A, and ask your employer to issue you a corrected form. Don’t try to change it yourself – your employer must send a correct copy to the government for the change to be effective.
- Don’t assume your W-2 is correct – compare the figures in Box 1 (federal wages), Box 2 (federal income tax withheld), Box 16 (state wages) and Box 17 (state income tax withheld) to the figures on your final paycheck stub for 2020.
- If your employer paid for your moving costs during the year, review Box 1 to see if those payments are included there. Prior to tax year 2018, if your employer paid your moving costs you were also able to deduct what you spent for moving expenses, but under tax reform, you can no longer claim moving expenses unless you are active-duty military.
- If you don’t receive your W-2 form by the first week of February, contact your employer. If the employer refuses to provide your W-2, contact the IRS at 1-800-829-1040 with the employer’s name, address, telephone number, and employer ID number, if you know it. If you still can’t get a W-2 form, file Substitute W-2 Form 4852 with your tax return, based on your final pay stub from that employer for 2020.
Knowing how to read a Form W-2 can help you understand your salary, and can also help you get a head-start when preparing your taxes. TurboTax lets you get a jump start on your taxes by allowing you to snap a photo of your W-2 from your phone or tablet no matter what your tax situation is. TurboTax can also import your W-2 eliminating data entry. With TurboTax W-2 import, over 150 million W-2s are supported.
There may be other forms you may start seeing soon like Form 1098 for mortgage interest or Form 1095-A, B, or C for health insurance information. And keep in mind: per the IRS, you only need to file form 1095-A if you purchased 2020 health insurance in the Health Insurance Marketplace, but you don’t need to wait for a form 1095-B or C. They are for information purposes only.
Don’t worry: TurboTax makes filing your taxes effortless by asking simple questions related to you and gives you the tax deductions and credits you’re eligible for based on your entries. You don’t need to know anything about tax forms or tax laws.
If you have questions, you can connect live via one-way video to a TurboTax Live tax expert with an average of 12 years experience, to get your tax questions answered. TurboTax Live tax experts are available in English and Spanish, year-round and can also review, sign, and file your tax return from the comfort of your home. You can also fully hand over your taxes to a TurboTax Live tax expert – from start to finish. Now get to filing…and that tax refund!