What information does a W-2 form provide?

• A. Annual income and tax withheld
• B. Details of investment earnings
• C. Business expenses incurred by the employer
• D. Health benefits received by the employee

Answer: (A)

A W-2 form is a critical document issued by employers to report an employee's annual income, as well as the amount of taxes withheld from their paycheck throughout the year. It provides a summary of the employee's earnings and tax deductions, including federal, state, and other tax information that the employee will use when filing their tax return. This form is essential for individuals to accurately report their income and understand the tax liabilities they are responsible for.

The other options focus on different financial aspects that are not covered by the W-2 form. Investment earnings are typically reported on forms such as the 1099 series rather than the W-2, business expenses incurred by the employer are reported on the employer's tax filings rather than the employee's, and health benefits received are usually indicated on a separate form or section of the employer's tax documents. Thus, the W-2 form specifically highlights income and tax withholding, making it the correct choice.