The W-2 is one of the most important tax forms in the United States. However, the difference with other returns is that most taxpayers they should not fill them out themselves, but their employers. Now, if you’re an employer and you don’t know exactly how to fill out the W-2 form, or you’re just not sure if you need one, this guide will serve you perfectly.
- 1 What is a W-2 form?
- 2 Are Form W-2 and Form W-4 the same thing?
- 3 How many W-2 forms do I need to submit?
- 4 How to fill out the W-2 form?
- 5 Are you an employee? How to find your W-2 online and what to do if you can’t find it
- 6 Deadline to submit W2
- 7 In conclusion, everything about Form W-2
What is a W-2 form?
The W-2 form is used to report both wages and taxes. This means that the form shows how much money your employees have earned during the year and the amount of withholding tax you have paid to the Internal Revenue Service (IRS).
Now, it is important to note that not everyone needs to fill out a W-2 form. In fact, independent contractors and self-employed people abide by the 1099 form.
So when should you download and submit the W-2 form? If your employees earn more than $600 a year or if you withheld any amount from them for Medicare or Social Security.
In this case, you are obliged to fill in the Form W-2 and submit it before the deadline, which is January 31 of each year.
Are Form W-2 and Form W-4 the same thing?
If you’ve ever confused Form W-2 with Form W-4, you’re not alone! In fact, this is a very common mistake. To easily differentiate them, look at the person who must fill out the form in each case:
- W2: the employer
- W4: the employee
If the worker is changing jobs, needs to change their tax filing status, or update their financial information, they will need to give you a new W-4 form that lists pre-change deductions. Only then will you know the exact amount of taxes that you must withhold.
How many W-2 forms do I need to submit?
Let’s see it in detail. Copy A should be given to the Social Security Administration (SSA or Social Security Administration), along with the W-3 form that includes a summary of all W-2s for each payroll worker. Note that the SSA only accepts electronic forms, not photocopies.
Copy 1 of the W-2 form is sent to the State Department of Revenue or to the Local Tax Department correspondent. Employees receive copies C, B and 2. They have to keep C as proof, while B and 2 must file them with your tax returns federal, state, municipal or local, as appropriate.
How to fill out the W-2 form?
If you are an employer and you are not completely clear on how to fill out the form, congratulations! You can use our official guide to fill out form W-2 like an expert.
Look at the boxes on the right. The employee’s social security number (a) goes at the top and below the employer data is placed, including the identification number (b), the Name (c) and fiscal address (c).
Then you will have to add the control number (d), which may or may not be used for payroll purposes, and finally fill in the box with the name of the employee (e), together with your address (e).
Boxes 1 – 10
Now let’s look at the numbers to the right of the form. In box 1, the annual income of the employees is placed. This includes wages and tips, as well as all taxes that have been withheld. The deductions corresponding to the individual retirement account (IRA or Individual Retirement Account) should not be considered in this section.
Boxes 2, 4 and 6 are for the federal income tax, social security and Medicare that you have paid to the Administration during the current fiscal year.
If you work in the food and beverage industry, you should place the amount of tips that your employee has received in box number 7. Total the amount of income you receive -including salary- and write it in box 8.
Box 3, you must place the amount of taxable income for Social Security. Do not include tips here. Since this number reflects taxable income without deductions, it could be more than the amount in Box 1.
According to your calculations, Is this figure less than that in box 1? You may not be wrong. Remember that Social Security can’t tax employees above a certain threshold, which — taking the 2019 example — is $132,900.
Since there is no limit on the income taxable for Medicare, the amount you must enter in box 5 does include wages and tips. Box 9 must be left blank because, since 2011, the government eliminated the payment due option for the Earned Income Tax Credit (EITC). Now, eligible filers receive their EITC in one refund, rather than over the course of the year.
If your employees receive any deduction for daycare expenses, that amount goes in box 10.
Boxes 11 – 14
If your employee withdraw money from your 457(b) plan or your non-qualified retirement plan, you must enter the dollar amount in box 11.
Regarding box 12, it might take a while to fill it out because you will have to enter different codes and amounts depending on the additional benefits and payments that the worker receives. There are 26 codes from A to Z and AA to EE on the back of the form, in case you need them.
Box 13 has its own three boxes to indicate if your employee is part of a retirement or retirement plan, if he received payments for the illness of a third party and if he is a legal worker. Keep in mind that independent contractors count as statutory employees in certain situations, including full-time salespeople who work primarily for a company.
Any other deduction you missed, you can write it in box 14. For example, tuition assistance, union dues or others.
Boxes 15 – 20
At the bottom of the form, you will find boxes 15 through 20. If your state requires it, you must write the state identification number in box 15.
Box 16 refers to the total employee income that is subject to state income tax withholding, while in box 17 you only need to indicate the amount of the istate income tax that was withheld. All income considered for the local taxation are placed in box 18.
In box 19, write the amount of the local tax withholdings. And finally, in box 20, the specific name of the place to which the local taxes.
Are you an employee? How to find your W-2 online and what to do if you can’t find it
It is common for employers to mail W-2 forms or choose to do this process entirely online. If you open the online payment system or your company’s human resources program, you’ll find a tab that contains all tax forms, including the W-2.
According to the legal provisions of the country, employers must send the W-2 by the end of January, but if they preferred the online option, it can take a couple of days for the forms to be reflected. If you can’t find it, ask your employer for a copy or apply directly to the IRS. If you notice that a W-2 form is missing or lost, it is important that you contact your employer as soon as possible. If you don’t receive the forms before Valentine’s Day, it’s best to call the IRS.
Remember that the W-2 is necessary for complete your tax return, although you can always fill the form 4852 in case you don’t have it. This form is the substitute for the declaration of wages and taxes. If you prefer to wait for your W-2, consider requesting a return extension.
If you happen to receive your W-2 late and notice that your information differs from the estimates you made on Form 4852, complete an additional form (the Shape 1040X) to let the IRS know and avoid future problems. This action is known as the amended tax return And it’s more common than you think.
Deadline to submit W2
According to the Internal Revenue Service, W-2 forms must be sent to employees no later than January 31 for forms derived from the previous calendar year. Even if employees don’t receive them in the mail on that date, they should be sent, at a minimum, by that time. For companies that do not follow this particular protocol, there may be consequences.
In conclusion, everything about Form W-2
The W-2 form reveals how taxes affect employees’ annual income. Additionally, through the W-2, employees can find out if they are going to receive a refund for having paid more taxes than necessary.
If you are an employee and your W-2 has an error, you must notify your employer as soon as possible. In some cases, such as errors in the name or number of the social Security, you’ll have to order a new one, otherwise you won’t be able to use it on your tax return.
If you are an employer, remember that it is your obligation to fill out the w-2 form and file it. To do so, you have several options. You can download the form from the IRS website or from a payroll program and fill it out by hand, or you could purchase a tax preparation program. This type of software it is much easier to handle and will help you finish faster.
If you are confused about how to fill out and file w-2s, or have a complex tax situation, hire a financial advisor. It may represent an extra expense for you today, but this simple tax practice will help you avoid penalties in the future.