What Is Locality Name On W-2 Mean? Explaining Form W-2?
What is W2 form?
A W-2 form is a document issued by employers to employees that records wages earned and taxes withheld over the course of the previous year. This information is reported to the Internal Revenue Service to ensure that employees pay the necessary taxes.
The form contains the employee’s Social Security number, name, address, and other relevant information. The form also includes the employer’s name and address, the employee’s income and taxes withheld, and the locality name. The locality name is an optional field which may be used to identify the city, county, or state in which the wages were earned.
This information can be used to track an employee’s income for tax purposes. Additionally, the locality name may be used to calculate the applicable taxes for a given region.
The W-2 form is a vital document for employees and employers alike, and understanding its contents is essential for compliance with tax laws.
Purpose Of Form W-2
Form W-2 is used to document an individual’s earned income and related taxes for the purpose of filing federal and state tax returns. It provides the following information:
- The total amount of wages, tips, and other compensation paid to the employee during the year.
- The amount of taxes withheld from the employee’s wages.
- The types of benefits that the employee received, such as health insurance.
- The locality name for the employee’s place of work.
The locality name indicates the geographic location of the employee’s workplace. This information is used to determine the applicable tax rate for the employee. The locality name also helps identify the correct filing address for the employee’s tax return. The locality name is required to be included on Form W-2 in order to ensure accurate filing of taxes.
Personal Information Of Employee
Employees are required to provide personal information in order to complete Form W-2. This includes Social Security Number (SSN) and Employer Identification Number (EIN). An official address for correspondence must also be provided, which may differ from the employee’s working address. Additionally, a control number for the employer’s annual wages and benefits is needed. Boxes E and F require the employee’s name and address, which must match the information on their Social Security Card.
The accuracy of Box A, E, and F must be double checked. The ‘locality name’ in Box 15 on the W-2 form refers to the city or county that the employee lives in, which is used to calculate local taxes.
| Employee Information | ||
|---|---|---|
| Box A | SSN | |
| Box B | EIN | |
| Box C | Address for Correspondence | |
| Box D | Control Number | |
| Box E & F | Name & Address |
Accurate personal information is essential for the completion of Form W-2. Furthermore, the locality name in Box 15 is used to determine applicable local taxes. Knowing the importance of the information helps employees to ensure that their forms are filled out correctly.
Income And Federal Taxes
Boxes 1 and 2 of Form W-2 display the taxable wages or salary and the amount of federal taxes withheld, respectively. These two boxes are important for the employee to accurately document their taxable income and federal taxes withheld for the year.
Other boxes on the form provide additional relevant information:
- Box 3 contains the total amount of wages subject to the Social Security Tax.
- Box 4 contains the amount of total Social Security Tax withheld.
- Box 6 contains information about the total taxes withheld under Medicare taxes.
Understanding each of these boxes is important for the employee to accurately file their taxes and receive the correct tax refund or payment owed. It is important to ensure all the information on the W-2 form is correct. Any errors on the form can lead to discrepancies between the actual taxes paid and the amount reported on the employee’s tax return.
Taxes And Tips
Tips received by employees may be subject to Social Security and Medicare taxes, as indicated on Form W-2. Box 5 on the Form W-2 records the wages taxable for Medicare taxes, which may differ from the wages recorded in Box 1. Box 7 records tips received in addition to basic wages, while Box 8 records allocated tips given to an employee.
Furthermore, the Form W-2 includes the locality name of the employee’s place of work. This is important as the locality name is used to determine the tax rate applicable to the employee’s wages. This information is also used to identify the state, county, or city tax rate that applies to the wages.
Knowing the locality name is essential to ensure that the employee’s wages are correctly reported and taxed. It is important to note that tips are subject to Social Security and Medicare taxes, and the locality name is required to ensure the correct rate of tax is applied.
Advanced Payments And Benefits
Advanced payments and benefits are recorded on Form W-2 in Boxes 9 to 14.
Box 9 is typically empty while Box 10 holds reimbursements for dependent care expenses.
Box 11 records amounts from non-qualified deferred compensation plans or Section 457 pension plans.
Box 12 includes taxable income already deducted from total taxable income.
Box 13 has checkboxes for Statutory Employee, Retirement Plan, and Third-Party Sick Pay, while Box 14 is for any other information, such as labeling Union dues.
Locality name on W-2 is the geographical location of the place of employment. This is done to ensure that the employee is paying the correct amount of taxes based on their location.
The locality name also helps the employer track down the accurate filing address when filing taxes.
It also helps the Internal Revenue Service (IRS) track down the correct employer tax returns.
In addition, the locality name is necessary for employers to complete Form W-2 accurately.
State Taxes
State taxes are reported on Form W-2 in Boxes 15, 16, 17, and 18.
Box 15 contains the name of the state where wages were earned.
Box 16 indicates the total state wages and tips.
Box 17 reports the amount of state tax withheld from the paychecks.
Box 18 indicates the same income as Box 1 and Box 16, and shows local wages and tips if applicable.
Box 19 reports local income tax withheld and sent directly to the locality.
The locality name is indicated in Box 20. It can be the city or county the taxpayer resides in or a different district if the local tax withheld is different from the taxpayer’s place of residence.
In such a case, multiple local taxes may need to be filed.
Paying state taxes helps to fund public services in the taxpayer’s state of residence.
Frequently Asked Questions
Does the Locality Name on W-2 affect my tax return?
The locality name on a W-2 form may play a role in determining a taxpayer’s total tax liability. Depending on where the taxpayer resides, it may affect the amount of state or local taxes they are obligated to pay. Therefore, it is important to fill out the W-2 form accurately.
Are there any exemptions from reporting Locality Name on W-2?
The reporting of locality name on a W-2 form may be exempt in certain circumstances, such as if the employee resides in a different locality than where the work was performed. Additional exemptions may be present depending upon the particular situation.
How do I report Locality Name on W-2 if I have multiple jobs?
When reporting locality name on W-2, if an individual has multiple jobs, the locality name should be reported for each job separately. The locality name should correspond to the locality in which the wages were earned.
Can I amend my Locality Name on W-2 after I have filed my taxes?
It is possible to amend one’s locality name on a W-2 after filing taxes, however, it is important to check with the Internal Revenue Service (IRS) for specific instructions on how to do so.
How does the Locality Name on W-2 affect my Social Security benefits?
The locality name on a W-2 form does not directly influence Social Security benefits. However, the state and local taxes listed on the form are used to calculate benefits.
Conclusion
Form W-2 is an important tax form for employers and employees alike. It provides a comprehensive overview of an employee’s earnings, taxes paid, and benefits received during the year.
The locality name on the form is used to determine the state and local taxes that the employee may have to pay. With this information, employers and employees can accurately file their taxes.
With the proper information in hand, employers and employees can ensure that they pay the correct amount of taxes in a timely manner, thus avoiding any potential penalties.