Procedure for Filling out W2 Forms for Your Employees
It is the tax season when many people rush to have their tax returns filed in time to avoid penalties. All business are expected to have their correct tax returns filed before a particular date to ensure that they are tax compliant. The internal revenue service (IRS) requires that every business person fills out form W2 for their employees. Amount of tax due, salaries the personnel are entitled to as well as any other deductions are some of the information provided on the W2 form. The forms should be filled for all employees earning more than US$ 600 per year. Here is what you need to do when filling the W2 forms.
Categorise Your Employees
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 Appropriate Employee Data
After classification of your workers, the next step is to obtain all the relevant details from them. Such information includes the amount each employee is earning, the amount of tax to withhold as well as any reliefs they might be entitled to. 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
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. Another option is to have the forms filed online by accessing the social security website.
Fill out the W2 Forms with the Right Information
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. The number of employees you have will determine the number of forms you fill since employee needs a single form.
Submit the Completed Forms
For your workers to file their own tax returns they need to have a copy of the completed W2 form. You are also expected to send another copy of the form to the state department of revenue. The copies are usually printed first in the correct format and then forwarded in hard copy.