What is the primary purpose of Form W-2?

The primary purpose of Form W-2 is to report an employee's annual wages and taxes withheld. This form is required to be provided by employers to their employees as well as to the Social Security Administration (SSA) and the IRS. It details the total earnings received by the employee during the year, along with the amount of federal, state, and other types of taxes that have been withheld from their paychecks.

Therefore, employees use the information on Form W-2 to accurately file their income tax returns. It ensures that employees are aware of how much they have earned and how much tax has been paid on their behalf, facilitating the reconciliation of tax liability when submitting their tax return.

The other options represent different forms and purposes that do not apply to Form W-2. For example, self-employment income is documented on Schedule C (or the appropriate business income reporting forms), capital gains and losses are calculated using Schedule D, and interest income from savings accounts is reported on Form 1099-INT. Thus, the specificity and thoroughness of Form W-2 for employee wages and tax obligations make it the correct choice.