Procedure for Filling out W2 Forms for Your Employees
During the tax season, many people are usually in a hurry to file their tax returns in an endeavour to escape the penalties borne by those who fail to do this. Tax compliance is required of every business which is supposed to file their tax returns at the end of every financial year. The W2 form is among the many forms you are required to fill by the internal revenue service (IRS) for your employees as a business owner. The W2 form contains information about your employees’ wages, the amount of tax withheld from them as well as other deductions from their salaries. Anyone whose total earnings per year exceed US$ 600 is supposed to have W2 forms filled for them. The following are the steps to take to complete the W2 form.
Group Your Workers
Depending on various considerations, different employees are put into different classes. These include their earning category, whether they are full-time or part-time employees or simply contractors engaged by your business to provide certain goods or services. You may also need to look at any other benefits due to an employee like tax and insurance reliefs, vacations and sick leave pay.
Collect the Relevant Information from Your Employees
You need to collect the appropriate information from your employees once you have sorted them into their respective classes. Such information includes the amount each employee is earning, the amount of tax to withhold as well as any reliefs they might be entitled to. You will also need their names and addresses and also social security numbers. This process will be rendered faster and easier if you gather the data in advance.
Look for the W2 and W3 Forms
The Internal Revenue Service website contains both the W2 and W3 forms for downloading. W3 is the accompanying form to W2 which bears the details and records of the employer. Once you access the site and register your business, you can have the forms downloaded. Another option is to have the forms filed online by accessing the social security website.
Complete W2 with the Collected Data
The form W2 obtained should then be completed with the relevant employee data. And while you are at it, ensure that you avoid any error that might eventually prove costly either to your business or your employee. The number of employees you have will determine the number of forms you fill since employee needs a single form.
Give out The W2 Forms
The last step in this process is to have copies of the filled out forms presented to your employee so that they can also file their returns. You are also expected to send another copy of the form to the state department of revenue. It is usually expected that you first print out the forms in the correct hard copy format before you submit them.