Procedure for Filling out W2 Forms for Your Employees
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. 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. It provides details of employees salaries, amount of tax payable and also any other money deducted from their pay. Any employee earning more than US$ 600 per annum is supposed to have the W2 forms filled. The following are the steps to take to complete the W2 form.
Group Your Workers
Your employees are grouped differently depending on a number of factors. 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.
Gather the Right Details From the Workers
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. Names and addresses, social security details are also required for the completion of these forms. 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. Form W3 is normally filled together with W2 and contains the employer’s information. 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.
Fill out the W2 Forms with the Right Information
After obtaining the forms and gathering the right information, the next step is to actually fill out the forms. 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.
Forward the Filled out Forms
For your workers to file their own tax returns they need to have a copy of the completed W2 form. The other copy is then submitted to the state department of revenue. The forms are printed in the appropriate hardcopy format before being sent.