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. It is a requirement that every business should file their tax returns at the close of every trading year, so as to be in the government’s good books. 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. The forms should be filled for all employees earning more than US$ 600 per year. The following are the steps to take to complete the W2 form.
Sort Your Employees into Categories
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. Other factors include insurance and tax reprieves, sick and leave allowances.
Collect the Appropriate Employee Data
After classification of your workers, the next step is to obtain all the relevant details from them. 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.
Look for the W2 and W3 Forms
Both W2 and W3 forms are available for download from 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. Alternatively, you can check out the social security website and fill out the forms online.
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. And while you are at it, ensure that you avoid any error that might eventually prove costly either to your business or your employee. Since each employee requires a single form, the more you have, the more the 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. Another copy of the form is then sent to the state’s department of revenue. It is usually expected that you first print out the forms in the correct hard copy format before you submit them.