This is How to Complete Form W2 for Your Workers
It is the tax season when many people rush to have their tax returns filed in time to avoid penalties. Tax compliance is required of every business which is supposed to file their tax returns at the end of every financial year. Form W2 is one of the forms to be completed by the business owner for their workers. The W2 form contains information about your employees’ wages, the amount of tax withheld from them as well as other deductions from their salaries. The forms should be filled for all employees earning more than US$ 600 per year. The following are the steps to take to complete the W2 form.
Sort Your Employees into Categories
A number of factors are taken into considerations when classifying your employees. 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 also need to consider the other benefits enjoyed by the employee such as insurance and tax reliefs, leave and sick pay.
Collect the Appropriate Employee Data
Once your workers have been appropriately categorized, you need to gather all the relevant information for the W2 forms. The details to record includes salary amount, amount of tax due and also allowances and reliefs due to each employee. You will also need their names and addresses and also social security numbers. The information should be gathered beforehand to make it easier to fill the forms.
Look for the W2 and W3 Forms
Both W2 and W3 forms are available for download from the internal revenue service website. W3 is the accompanying form to W2 which bears the details and records of the employer. To obtain the forms, you only need to register your business on the IRS website. The other alternative is to register at the social security website and have the forms filed electronically.
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. A separate form is needed for each employee, hence the number of employees will dictate how many forms you will have to complete.
Give out The W2 Forms
After the preceding steps, you need to give out a copy of the filled out form to the respective employee to facilitate the filing of their tax returns. Another copy of the form is then sent to the state’s department of revenue. The copies are usually printed first in the correct format and then forwarded in hard copy.