This is How to Complete Form W2 for Your Workers
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 internal revenue service (IRS) requires that every business person fills out form W2 for their employees. It provides details of employees salaries, amount of tax payable and also any other money deducted from their pay. 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.
Sort Your Employees into Categories
A number of factors are taken into considerations when classifying your employees. Part-time or fulltime employment basis, contractual agreement, as well as the salary scale of the employee, are some of the factors affecting this classification. 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
Once your workers have been appropriately categorized, you need to gather all the relevant information for the W2 forms. Employee salary scale, tax payable as well as other benefits and reliefs due to the employee are some of the details you need to have for each staff member. You should also be furnished with the personnel names and addresses as well as social security data. Ensure that you collect this information before you begin the process so that the process will be as smooth as possible.
Obtain the W2 and W3 Forms
You can access both the W2 and W3 forms for download at the Internal Revenue Service website. 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
Use the personnel information obtained earlier to fill out the actual W2 forms. This should be done carefully so as to avoid making any mistakes that may end up costing you 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.
Submit the Completed 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. The other copy is then submitted to the state department of revenue. The copies are usually printed first in the correct format and then forwarded in hard copy.