The purpose of the W-2 form is to report annual wages and taxes withheld to the federal government.

• A. It reports annual wages and taxes withheld
• B. It reports quarterly payroll taxes to the state
• C. It reports employee benefits
• D. It reports payroll deductions for contractors

Answer: (A)

The W-2 is the annual summary of what you earned and how much tax was taken out by your employer, provided to you and the IRS for the purpose of filing your personal income tax return. It shows wages, tips, and other compensation, along with federal income tax withheld and Social Security and Medicare taxes withheld. This information is what you use on Form 1040 to determine whether you owe more tax or get a refund. It’s an annual reporting form, not a quarterly filing to the state, and it’s for employees—independent contractors receive a different form (1099-NEC). Some boxes may note benefit amounts, but that isn’t the primary purpose of the form.