Your Complete Guide to Employer W-2 Filing Instructions and Information
As an employer, you’re responsible for providing your employees with accurate documentation that reports their annual wages and tax information. This is where the W-2 form comes into play. If you’re new to the process or just need a refresher, this complete guide to employer W-2 filing instructions and information will walk you through everything you need to know.
What is a W-2 form?
Every January, employers distribute W-2 forms to their employees for the previous tax year. It reports their total annual income, including wages, tips, and any other compensation. The form also highlights the amount of taxes withheld from an employee’s paycheck throughout the year, such as federal and state income tax, Social Security tax, and Medicare tax.
Who needs to receive a W-2 form?
Any employee who earned $600 or more during the tax year needs to receive a W-2 form. This includes full-time, part-time, and seasonal employees. Independent contractors, on the other hand, are not considered employees and should receive a different form called a 1099-MISC.
When do W-2 forms need to be distributed?
W-2 forms must be distributed to employees by January 31st of the following year. The deadline for employers to file their copies of the W-2 with the Social Security Administration is also January 31st. If the deadline falls on a weekend or holiday, the deadline is postponed to the next business day.
What information is needed to complete a W-2 form?
To complete a W-2 form, you will need the following information:
- Employer name, address, and Employer Identification Number (EIN)
- Employee name, address, and Social Security Number
- Total annual compensation, including wages, tips, and other compensation
- Amount of federal, state, and local income tax withheld
- Amount of Social Security and Medicare tax withheld
- Any other deductions or benefits offered by the employer
What are the consequences of incorrect W-2 forms?
Incorrect W-2 forms can lead to penalties and fines. If the IRS finds any errors, they may impose penalties and fines that could cost the employer several hundred dollars per form. Additionally, employees may experience delays in their tax returns or even face audits if they receive incorrect information.
What are common mistakes to avoid when filling out W-2 forms?
Here are some common mistakes to avoid when filling out W-2 forms:
- Incorrect or incomplete Social Security Numbers
- Inaccurate or missing information regarding taxable and nontaxable income
- Misclassification of workers as employees or independent contractors
- Wrongly calculating tax withholdings
- Not filing copies of the W-2 forms with the Social Security Administration
Conclusion
W-2 forms are an essential part of annual tax reporting for both employers and employees. It’s crucial to stay informed about the filing instructions and information to ensure accuracy and avoid penalties. By following this complete guide to employer W-2 filing instructions and information, you’ll be well-equipped to handle the process accurately and efficiently.
