Paystub Templates TaxesMarch 31, 2023
What do I need paystubs for? What is a W2 and why do I need one?
A paystub is a document that provides detailed information about an employee’s pay for a specific pay period. The purpose of a paystub is to provide transparency and accountability for both the employer and the employee regarding the amount of pay earned, deductions taken, and taxes withheld.
There are several reasons why it’s important to keep your paystubs. First, they can be used to verify that you’ve been paid the correct amount and that all deductions and taxes are accurate. Additionally, if you ever need to apply for a loan, rent an apartment, or apply for government benefits, your paystubs may be required as proof of income.
You may be asked to provide your paystubs for various reasons. For example, if you’re applying for a loan or credit card, the lender may want to see your paystubs to verify your income. Similarly, if you’re renting an apartment, the landlord may want to see your paystubs to ensure that you have a steady income to pay rent. In some cases, you may also need to provide your paystubs to the government to verify your income for tax purposes or to apply for government benefits.
What are W2 forms? Why do I need a W2?
A W2 tax document is a form that provides information about an employee’s annual wages and taxes withheld for a given tax year. The purpose of the W2 is to report the employee’s earnings and tax payments to the Internal Revenue Service (IRS).
The W2 document is provided by the employer, who is required by law to provide the form to their employees by January 31st of the year following the tax year. The employer also sends a copy of the W2 to the Social Security Administration (SSA) and the state tax agency.
As an employee, you may need to provide your W2 document to several entities, including the IRS, state tax agency, and your tax preparer if you use one to file your tax return. You may also need to provide your W2 document to other parties, such as a lender or landlord, as proof of income.
In addition to fulfilling tax obligations, the W2 document can also be used to keep track of your earnings and taxes withheld over the course of the year, which can be useful for budgeting and financial planning. It can also be used as a record of employment for future reference, such as when applying for a loan or new job.