What is included in Form W-2 for reported earnings?

Form W-2 is an essential document used for reporting wages, tips, and other compensation paid to an employee for a given tax year. The form provides a comprehensive overview of all earned income, which encompasses not only regular hourly wages and salaries but also additional compensation such as bonuses and tips that an employee may receive.

The inclusion of tips is particularly notable since they contribute significantly to an employee's overall earnings, especially in industries like hospitality where tipping is common. The data on Form W-2 ensures that all forms of compensation an employee receives are accurately reported to the IRS, which plays a crucial role in the employee's income tax return. Therefore, the assertion that all earned income, including tips, is included in Form W-2 is important for ensuring compliance and accuracy in tax reporting.