Know the Details of a W-2 Form
Every government’s revenues are majorly raised from taxes. Individuals and companies remit their taxes to the government directly. Government also taxes us through taxes included in the prices of the goods we buy. When an employee gets employed by a firm, they are required to sign agreements with the employer. The agreement for the employer to remit taxes on behalf of the employee is one of the agreements between an employer and the employee.
Companies paying taxes on behalf of their employees should give the W-2 form. The employee whose tax has been remitted as well as the government both get the W-2 form from the employer. It gives a detailed information on the earnings of the employees. The company has to prepare a form for each of its employees. As an employer, you, therefore, need to know the information to include in a W-2 form for your employees and the government.
Information filled in the W-2 categories is divided into three categories. Mistakes such as wrong tax amounts and risk of penalties are the reasons why the information in this form should be filed correctly. The form requires one to provide information such as the employee and employer terms, earning and tax details and finally any crucial information. Standard forms are available and an employer does not, therefore, need to go through the hustle of creating new forms. To get the forms, you may download them or get them from your tax agent.
The first section of the W-2 form involves information about the employee and employer. All the necessary information of the employee must be provided here. All information to be given is to be filled in the boxes provided in the form. In the boxes, information provided should include the social security number of employee, the address of both the employer and employee, full names of the employee, employee work number as well as their payroll number. This information should be filled correctly to avoid double taxation or duplication of forms.
Next the employer is to fill the financial details. Among the three sections of the W-2 form, this section is the most crucial. The financial details included will be a summation of all the employees’ earnings in the entire year. The employee’s full payment details as paid every month should be included here. The employer includes details of the employee about wages such as how much tax they have remitted on behalf of the employee as well as the total earnings of the employee. The form W-2, however, does not include allowances the employee gets that are not included in the employee’s salary. There is then an extra space for filling in any extra information that may be relevant to the tax issue.