What is the primary purpose of Form W-2?

The primary purpose of Form W-2 is to report an employee's annual wages and withheld amounts. This form is crucial for both the employer and the employee, as it summarizes an employee's earnings for the year along with the taxes that have been withheld from their paychecks.

When an employee receives their W-2, it includes important details such as the total wages, tips, and other compensation, as well as the federal, state, and other taxes withheld. This information is essential for the employee when filing their income tax return, as it provides the data necessary to accurately report income and claim any deductions or credits.

In contrast, while an employee's benefits, retirement contributions, and proof of employment are important aspects of employment, they do not form the primary purpose of the W-2. Other tax documents or statements serve those specific purposes, such as Form 1099 for independent contractors or various retirement plan forms that report contributions separately.