Tax Form and Refund Terms to Know

Key takeaways

Employers send Form W-2, which reports wages and withheld taxes, to employees by January 31 each year.
Form 1099-G reports government payments such as unemployment compensation and state or local income tax refunds.
Adjusted gross income is gross income minus certain adjustments; taxable income is AGI minus your deductions.
A wage and income transcript from the IRS can stand in for a missing W-2 and is available for up to 10 years.
Ordering a full copy of an old return by Form 4506 costs $30 per return and takes about 75 calendar days.

Tax paperwork arrives with box numbers, codes and terms that assume you already know the vocabulary. This glossary defines the forms and words most households meet between January and April, from the W-2 that reports your wages to the difference between a deduction and a credit. Each entry is short, and where a rule has a limit, fee or deadline, the number is stated.

Forms That Report Wages and Government Payments

Form W-2, Wage and Tax Statement. The form employers file to report an employee’s wages and withheld taxes to the employee, the IRS and the Social Security Administration. Employers must send your copy by January 31, or the next business day if that date falls on a weekend.
Form W-4, Employee’s Withholding Certificate. The form you give your employer to set how much federal income tax is withheld from each paycheck.
Form 1099-G. A form a government agency sends to report payments you received, most often unemployment compensation and refunds of state or local income tax. Benefits shown in box 1 generally count as taxable income and go on Schedule 1 of Form 1040. You generally do not need to attach the form to your return.
Form W-4V. A voluntary withholding request for having federal income tax taken out of unemployment benefits, so the tax is paid during the year rather than at filing time.

When a Form Does Not Arrive

Wage and income transcript. An IRS record showing the data reported on Forms W-2 and the 1099, 1098 and 5498 series. Request it through your IRS online account or with Form 4506-T. The IRS can provide it for up to 10 years, though data for a currently processing year may not be complete until earnings are reported. State and local tax information is not included.
Form 4506-T. The form used to request a transcript by mail or fax. Most requests are processed within 10 business days from the date the IRS receives them.
Form 4506. The form used to order an actual copy of a full return. The IRS charges $30 per return and asks you to allow 75 calendar days. Copies of Form 1040 are generally available for 7 years from filing before they are destroyed. The fee is waived for taxpayers affected by a federally declared disaster.
Social Security Administration. A separate source for W-2 wage information; call 800-772-1213.

Money tip: If you file electronically, you do not mail your W-2 or other income documents to the IRS. Keep them with a copy of your return, and mail them only if the IRS sends a letter asking for them.

Income Terms: Gross, Adjusted and Taxable

Gross income. Your total income before any subtractions: pay from work, self-employment earnings, dividends, rental income and investment gains.
Adjustment to income. A specific subtraction from gross income defined by the IRS, sometimes called an above-the-line deduction. Examples include certain self-employment expenses and half of self-employment tax.
Adjusted gross income (AGI). Gross income minus IRS-defined adjustments. AGI is among the most consequential figures on your return because it drives eligibility for many tax breaks, including the Child Tax Credit, the Earned Income Tax Credit and the deduction for medical expenses.
Standard deduction. A fixed dollar amount you subtract from AGI instead of listing expenses one by one. Amounts change over time and differ by filing status, so check current figures on the IRS website.
Itemized deductions. An item-by-item list of deductible expenses. You subtract whichever is larger, the standard deduction or your itemized total.
Taxable income. The amount of AGI left after subtracting deductions. The IRS applies tax brackets to this figure to work out what you owe. Both AGI and taxable income appear on Form 1040, with AGI calculated first.

Deduction vs. Credit: Why the Difference Matters

Deduction. An amount that reduces your taxable income, so its value depends on your tax bracket. The same dollar deduction is worth more to a taxpayer in a higher bracket than a lower one.
Credit. An amount that reduces the tax you owe directly, dollar for dollar. For the same dollar amount, a credit is worth more than a deduction.

Paying Tax Through the Year and at Filing

Withholding. Income tax taken out of pay or benefits during the year and credited against what you owe. If it falls short, the gap shows up as a balance due when you file.
Estimated payments. Quarterly tax payments made during the year by people who expect to owe tax, such as someone receiving unemployment benefits with no withholding. Paying as income arrives can help you avoid a large balance and possible penalties.
Refund. The amount returned when withholding and estimated payments exceed the tax you actually owe. Some households use a refund to build a cash buffer, as explained in how big your emergency fund should be.
Offset. A reduction of a refund to pay certain debts you owe. Which debts can trigger an offset depends on federal and state rules, so contact the IRS or the agency you owe for the specifics of your situation.

Common questions

Q: What should I do if my W-2 does not arrive?

A: Contact your employer right away to ask whether the form was issued or request a corrected copy. You can also pull a wage and income transcript from your IRS online account, or use Form 4506-T, which the IRS processes within about 10 business days.

Q: Do I have to pay tax on unemployment benefits?

A: Generally, yes. Unemployment compensation shown in box 1 of Form 1099-G is included in federal taxable income. You can ask to have federal tax withheld from the benefits using Form W-4V, or make quarterly estimated payments.

Q: Is a state tax refund always taxable?

A: Not necessarily. You generally report a state or local income tax refund on your federal return only when you claimed a federal deduction for those taxes in an earlier year and that deduction actually lowered your federal tax.

Q: What is the difference between AGI and taxable income?

A: Adjusted gross income is your gross income minus certain IRS-defined adjustments, and it drives eligibility for many credits and deductions. Taxable income comes later: it is AGI minus your standard or itemized deductions, and it is the figure used to calculate your tax.

This article is for general information and education only and isn’t personal financial, tax or legal advice. Rates, fees and rules change, so check current details with the provider or an official source before making decisions.