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 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 pay and must be included
in your gross income.
Payments received as severance pay are also included in your gross income.
Payments received for cancellation of employment are included in gross income,
in the year received, and should be reported as other wages and salaries.
This statement is true even if the payment was received as settlement under
the Age Discrimination and Employment Act.
Your employer provides 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 forms. Enter
the total federal income tax withheld on the line for withholding on your
tax return. Attach a copy of each Form W-2 to the front of
your tax return as indicated in the instructions for your return. Please note
that Form 1099 income is generally reported as self-employment income
rather than as wages or salary.
If you receive another Form W-2 after your return is filed,
you must file an amended tax return, Form 1040X (PDF). Tax Topic 308 provides information on amended returns.
If you have not received your 2001 Form W-2 by January 31,
2002, select Tax Topic 154 for assistance.
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