An analyst uses Form W-2 to determine personal cash flows when the client is what?

Form W-2 is a crucial document for employees that provides information about their earnings and tax withholdings for the year. When analyzing personal cash flows, using Form W-2 is particularly effective for individuals who receive wages or salaries as employees. This form details the total compensation paid by their employer, as well as any withheld taxes, making it straightforward to assess the individual's net income and thus their cash flow.

In contrast, self-employed individuals or member-managers of an LLC may receive income differently, such as various forms of profit distributions that W-2 does not capture. Retirees with pension benefits may rely on different forms of income documentation, such as 1099 forms for retirement benefits. Therefore, when assessing personal cash flow using Form W-2, it specifically applies to those classified as employees of a corporation, as their employment income is accurately reported in a manner that allows for effective cash flow analysis.