Procedure for Filling out W2 Forms for Your Employees
Fear of tax penalties drives most people to rush to file their tax returns during the tax season. All business are expected to have their correct tax returns filed before a particular date to ensure that they are tax compliant. 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. Any employee earning more than US$ 600 per annum is supposed to have the W2 forms filled. This is how W2 forms are normally filled.
Categorise Your Employees
Depending on various considerations, different employees are put into different classes. Some of these factors are the amount of salary an employee is paid, their type of employment: whether full time or part-time basis, or whether they have been engaged as contractors to serve a certain purpose. You also need to consider the other benefits enjoyed by the employee such as insurance and tax reliefs, leave and sick 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. The details to record includes salary amount, amount of tax due and also allowances and reliefs due to each employee. You should also be furnished with the personnel names and addresses as well as social security data. This process will be rendered faster and easier if you gather the data in advance.
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. 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.
Input the Relevant Details into Form W2
After obtaining the forms and gathering the right information, the next step is to actually fill out the forms. This should be done carefully so as to avoid making any mistakes that may end up costing you or your employee. Since each employee requires a single form, the more you have, the more the forms you will have to complete.
Submit the Completed 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. 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.