What do you know about W-2 forms? If your answer is “not much,” you’re not alone. Understanding how to read and decipher important employment and tax documents like the W-2 form is critical for anyone employed, now or in the future. Without it, you’ll be unable to file your taxes, and if you don’t file your taxes, well…let’s not go there just yet. Teaching taxes in high school becomes essential, as students are starting their first job or heading off to college. They are becoming adults, responsible for managing their own income, all the while having no knowledge about the form that ends up in their mailbox every year.
Necessary Knowledge for Students
Many high school students are eager to land their first job in order to feel independent and self-sufficient. And of course, for the sheer joy of that first paycheck. Considering every employee who earns at least $600 annually will receive a W-2 (also known as wage and tax statement), you likely have students navigating the ins and outs of a W-2 form. While W-2’s can seem overwhelming initially, it’s simply a breakdown of earning over the last year, and the sooner students understand what to expect, the better.
Get Ahead of It
It’s important for you to teach these skills now, before they are stumped by a seemingly random document they receive in the mail come tax season. It’s good to know and teach a few things about W-2 forms before April sets in:
- Your W-2 form shows how much you earned which is known as your compensation, including wages and tips for the year.
- The document also details what you have paid in taxes throughout the year — both federal and state.
- In addition, it explains what was withheld from your pay, such as social security and medicare. It also shows how much you contributed to retirement and how much your employer paid for your health insurance.
- Your W-2 form may arrive by mail or electronically but it must be sent by your employer no later than January 31.
- When you are ready to complete your taxes, you will need this form and all its information. If you don’t file your taxes with the correct information, you can be subjected to fines and in some cases, possible jail time.
So there you have it. The basics for teaching students about W-2 forms. Your students are going to thank you someday for preparing them appropriately for life outside of the classroom. This is one of those topics where they can’t use the excuse, “when am I ever going to need this in real life?”
EVERFI’s online financial literacy program for high school students keeps students engaged with interactive activities including completing a W-2 and 1040EZ tax form.
Kayla Boyer is a K-12 Schools Manager based in Concord, New Hampshire. She works closely with teachers and students in New Hampshire and Maine to implement EVERFI’s suite of online learning resources addressing 21st century life skills. In her free time, she can be found hiking the white mountains with her labradoodle Molly or chasing around her active 5 year old daughter.