What is the purpose of a W-2 form?

The W-2 form serves the specific purpose of reporting an employee's annual wages and the amount of taxes withheld from their paycheck by the employer. This form is crucial for both employees and the IRS. Employees use the information on the W-2 to fill out their income tax returns, ensuring they report their income accurately and calculate their tax liability or refund correctly. The W-2 also provides a summary of earnings and the tax contributions made throughout the year, which is essential for personal financial planning and compliance with tax obligations.

The other options involve processes that do not directly relate to the function of a W-2 form. Filing for unemployment benefits is typically done through separate paperwork that proves eligibility based on previous employment and earnings. Applying for a loan usually requires different documents that demonstrate creditworthiness and financial stability rather than just income reporting. Furthermore, determining a credit score involves various financial behaviors and history, rather than solely relying on income information as outlined in a W-2.