What You Need to Do to Fill out W2 Forms for Your Business Personnel
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. Tax compliance is required of every business which is supposed to file their tax returns at the end of every financial year. The internal revenue service (IRS) requires that every business person fills out form W2 for their employees. The W2 form contains information about your employees’ wages, the amount of tax withheld from them as well as other deductions from their salaries. 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.
Sort Your Employees into Categories
Depending on various considerations, different employees are put into different classes. 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 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 Relevant Information from Your Employees
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. You should also be furnished with the personnel names and addresses as well as social security data. The information should be gathered beforehand to make it easier to fill the forms.
Obtain 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. Registration of your company on the IRS site will grant you access to the forms for download. Another option is to have the forms filed online by accessing the social security website.
Complete W2 with the Collected Data
The form W2 obtained should then be completed with the relevant employee data. 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.
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 forms are printed in the appropriate hardcopy format before being sent.