Which form is used to report employees' wages including tips for payroll reporting?

• A. Form W-2
• B. Form W-4
• C. Form 941
• D. Schedule SE

Answer: (A)

Form W-2 is the annual wage statement that employers provide to employees and file with the Social Security Administration. It reports the total compensation for the year, including wages, tips, and other compensation. Tips are part of employee earnings and must be included in the wage total reported on the W-2, so withholding and payroll tax calculations reflect the employee’s actual income. This form is what employees use when filing their tax returns and what the SSA uses for earning records. The other forms have different purposes: the withholding form the employee fills out to direct how much tax to withhold, the quarterly payroll tax return the employer files, and the form used to calculate self-employment tax for self-employed individuals.