What is a W-2 form?
The W-2 form is also known as the Wage and Tax Statement.
This is one of the most important records your employee will need at tax time, which comes up every year in April.
There are two main points reported on the employee W-2 Form:
- Wages you paid your employees (aka employee income), this includes tips and bonuses.
- Taxes you withheld/deducted from your employees.
On this form, you will list the total wages you’ve paid Melissa the past year, plus the amount of taxes you have withheld from her throughout the year. Taxes include the medicare, social security and income tax you’ve been sending to the IRS every three months.
Upon the filing of the income tax return, Melissa will attach copy 2 of her W-2 form online, or by mail and the IRS will use that info (plus Melissa’s W-4 info) to determine whether she’ll be receiving or she’ll be owing taxes.
In other words, Melissa needs this form to file the federal income tax return at year end (and state tax return where applicable).
The only way to be identified is through a SSN (Social Security Number), so be careful that this info is accurately entered.
Now you most likely are tempted to squeeze in the following question:
What is the W-4 form?
It’s a form Melissa has filled out when she was first hired to work for you.
It includes a SSN, marital status, number of dependents and all the information needed to calculate how much tax to withhold off each paycheck.
When is the deadline for the W-2 form?
You must provide the W-2 form 2021 to each of your employees before January 31st of the following year. So, in January of 2021 you’ll give them the form which reflects the income earned and the taxes withheld for the year just ended in 2020.
This gives Melissa ample time to prep and file her income taxes before the W-2 deadline, which is April 15th.
(There have been years when due to extenuating circumstances, the deadline was moved to a later date. Covid anyone?)
All Melissas know that you might mail them their copies, so they know to wait until mid February before they contact and start making demands.
It’s the employer’s job to provide all pertinent information regarding deductions and withheld taxes for the preceding year.
This is in preparation for the income-tax-filing which is always due on April 15th.
(Covid everyone! The year 2020 was not included in the dates mentioned above; this year’s deadline was pushed to May 17th.)
If you have delayed or neglected to provide this form to one or some or all of your employees, you can expect to be contacted by the IRS.
Who is responsible for filling the W-2 Tax form? Who needs this form?
Are you an employer?
Do you have employees or even just one employee?
Then this information is for you.
As an employer you are surely withholding money from your employees’ every paycheck (not because you are a bad boss but because you’re a good citizen).
This is tax money that every employer must deduct from their employees’ paychecks.
The above refers to tax payments for social security, medicare and income that you have been paying to the IRS (Internal Revenue Service) every three months on behalf of your employee.
(You’re the employee? Jump to the ***** at the end of this question for some pertinent info.)
Back to you, busy employer.
You are required to provide a W-2 form for each Melissa working for you who is earning more than $600 a year.
You also need to submit a copy of this form to the SSA who will then process it and transmit the tax information to the IRS.
Did Melissa (or another employee) quit in the middle of a year? They’ll still need a W-2 form from you for the months they worked for you. Unless they asked for it upon leaving (in which case you had 30 days to provide it).
Once again, you have to make sure it gets sent to them before January 31st.
You are never exempt from paying your taxes.
Your W2 form is the document that’ll help the IRS determine whether at year-end you’ll be getting a tax refund or writing a check for taxes owed.
How does one fill all relevant boxes on a W-2 form online?
Don’t get confused when you see that this form comes with (no less than) six identical copies. Surely you are astute enough to check out the lower left corner.
The following is included:
Copy A – You send to SSA – the Social Security Administration
Copy B – Melissa will attach to her federal tax return
Copy C – Melissa keeps in her records
Copy D – You keep for your records
Copy 1 – Attach to your state tax return (where applicable)
Copy 2 – To be attached to Melissa’s state tax return (where applicable)
It is every employer’s responsibility to ensure that each employee receives their W-2 form 2021, with all relevant information. (Check with your state to know exact post-covid deadlines.)
Make sure the information is accurate.
EIN (Employer Identification Number)
– Amount of wages earned for the year past.
– The total taxes deducted for the year.
For scannable forms, please visit www.irs.gov/orderforms and click on Employer and Information Returns. Your order will be mailed to you.
For free W-2 form online e-filing, please visit www.ssa.gov/employer. You will first have to register for Business Services Online. Once you set up your account and you receive a User ID, it’s a fairly smooth-and-simple process.
Using the SSA software enables small business owners to submit upto 50 W-2s at once.
Bear in mind.
It’s up to you, so be careful upon completing the W-2 because if the IRS finds an error in Melissa’s form, you, the employer will be the one to carry the fine.