What document summarizes an employee's year-end earnings and withholdings?

The document that summarizes an employee's year-end earnings and withholdings is the W-2. This form is issued by employers to their employees and provides a detailed account of wages earned and taxes withheld during the calendar year. It includes information such as the total amount of income earned, Social Security wages, Medicare wages, and federal and state income tax withholdings.

The W-2 is crucial for employees when filing their income tax returns, as it serves as a primary source of income reporting to the IRS. It ensures that employees have a clear understanding of their taxable income and what has already been withheld for taxes.

Other documents mentioned serve different purposes: the 1099 is used for reporting income earned as an independent contractor or from other sources, the 1040 is the individual income tax return form that taxpayers complete, and the payroll ledger is an internal document that tracks salaries, hours worked, and deductions but does not provide a summary for tax filing purposes. Thus, the W-2 is uniquely positioned as the definitive summary for employees' earnings and withholdings for the year.