What is the primary purpose of Form W-2?

The primary purpose of Form W-2 is to report wages and tax withheld for employees. This form is essential for both employers and employees in the tax reporting process. Employers use Form W-2 to provide their employees with a summary of their annual wages, tips, and other compensation, along with the amount of federal, state, and other tax withheld from their paychecks throughout the year.

This documentation is critical for employees when filing their personal income tax returns, as it helps them accurately report their income and ensure compliance with tax obligations. The information on the Form W-2 allows individuals to determine if they have paid enough tax during the year or if they are eligible for a refund based on their total income and withheld amounts.

The other options discuss different types of financial reporting not related to employee wage reporting. Form W-2 is specifically designed for employee wage and tax reporting, making it a vital part of the employment and tax structure in the United States.