Wages and salaries are payments received by an employee for performing
services for an employer. Generally, any payment received for performing personal
services must be included in your gross income. Amounts withheld from pay
for income tax, social security and Medicare taxes, pensions, insurance, and
union dues are considered "received" and must be included in gross income
in the year they are withheld. Generally, your employer's contribution to
a qualified pension plan for you is not included in gross income at the time
it is contributed. However, amounts withheld under certain salary reduction
agreements with your employer may have to be included in gross income in the
year they are withheld.
If an employer pays your social security and Medicare taxes without withholding
those amounts from your pay, that amount is considered wages and must be included
in your gross income.
Payments received for cancellation of employment are included in gross
income, in the year received, and should be reported the same as wages and
salaries. This statement is true even if the payment was received as settlement
under the Age Discrimination and Employment Act.
Your employer should provide a Form W-2 (PDF) showing
your total income and withholding for the year. Total the wage and salary
amounts reported on all your W–2 forms.
(If filing a joint return, you must also include all amounts reported to your
spouse on your spouse's W–2 forms). Enter the amount on the
appropriate line for wages, salaries, and tips on your tax return. Also total
the federal income tax withheld from all your W–2 forms,
and your spouse's W–2 forms if filing a joint return. The federal
income tax withheld is in Box 2 of your W-2 form. Enter the total
federal income tax withheld on the line for withholding on your tax return.
Attach a copy of each W–2 to the front of your tax return as
indicated in the instructions for your return. Please note that Form 1099-MISC (PDF) generally reports self-employment
income.
Note: Topic 407 provides information on Business Income.
If you receive another W–2 after your return is filed, you
must file an amended tax return, Form 1040X (PDF). Topic 308 provides information on amended returns.
If you have not received your W–2 by early February, select Topic 154 for assistance.
