Fillable Form W-2
Form W-2 also known as "Wage and Tax Statement" is an Internal Revenue Service Tax used in the United States to report wages paid to employees and the taxes withheld from them. The employer must complete a Form W-2 for each worker they pay a salary or oth
What is the W-2 form?
The W-2 Form, Wage and Tax Statement, is a legal document that reports an employee’s annual taxable wages and the amount of taxes withheld from wages. It can include information such as deferred compensation, dependent care benefits, contributions to a health savings account, and tip income. In addition, it is used by small businesses and large corporations to report taxable income to workers. If you are an employer who paid an employee during the year, you must accomplish a W-2 form, regardless of the duration an employee worked for you. For legal purposes, you should send out the document for any employee you paid a salary, hourly wages, or any form of compensation.
By filling out and submitting this form, an employer will be able to report its employees’ earnings and the tax withheld over the past year to the Internal Revenue Service (IRS), a U.S. government agency responsible for the collection of taxes and enforcement of all laws related to tax, and the Social Security Administration (SSA), an independent agency in the U.S. that administers Social Security. The form is submitted at the end of the year, before January 31 of every year. Independent contractors and freelancers do not need the W-2 form.
Failure to submit the form before the deadline results in penalties. Late submission within 30 days of the deadline results in a penalty of $30.00 per form. After 30 days, but before August 3, the penalty increases to $60.00 per form, capped between $200.00 and $500.00 depending on the size of business. After August 31, the penalty further increases to $100.00 per form, capped between $500.00 and $1,500.00 depending on the size of the business. In terms of filing W-2 forms with incorrect information, the penalty is $250.00 per receiving party, capped annually at $3 million; a single incorrect W-2 form to both the employer and the IRS incurs a penalty of $500.00. Intentionally failing to file has a penalty of $500.00. Furthermore, other penalties exist for illegal forms and for filing by paper even past the 250-form limit. If you are required to file 250 or more W-2 forms, you can take advantage of the benefits of e-filing.
If needed, you can request an extension of time to file W-2 forms with the SSA by submitting a complete application on 8809 form, Application for Extension of Time to File Information Returns. You must sign the application under penalties of perjury and send the form to the address shown on the form. The IRS will grant extensions to file W-2 forms only in limited cases for extraordinary circumstances or catastrophe, such as a natural disaster or fire destroying the books and records necessary for filing the forms. Your request will be subject for approval; nevertheless, when the agency approves your request for an extension, you will have an additional 30 days to file the forms.
What is withholding tax?
Withholding tax, which is also known as payroll withholding, is income tax that is withheld from wages and sent directly by an employer to the IRS. When an employer withholds a portion of its employees' income from their paycheck for federal income taxes, the amounts withheld are remitted. This happens throughout the year, as long an individual is working in the United States.
How do I fill out the W-2 form?
Employers are responsible for accomplishing the W-2 forms of its employees. The forms can be purchased at a local office supply store, from a Certified Public Accountant (CPA), or the IRS. There is a sample W-2 form available on the IRS website; however, printing it is not possible. When filling out the forms, employers should make sure that all the details they will input are accurate; hence, it is advisable to review all the information thoroughly before filing the forms with the IRS and the SSA.
You will need information about the employees, including their Social Security numbers, full legal names and residential addresses, and their compensation and taxes, placing the information into their respective labeled boxes. All information related to compensation and wages should be accurate, as they are the most important elements when completing the W-2 form.
In addition, if an employee recently moved and his or her address had changed, as long as his or her tax return bears the correct address, there should not be a complication.
The following details are required to complete the W-2 form:
Box A. Employee’s Social Security number (SSN). Incorrect or missing SSN may prevent the employee from filing his or her taxes on time
Box B. Employer identification number (EIN)
Box C. Employer’s name, address, and ZIP code
Box D. The control number assigned by the company’s payroll processing system. This information is optional.
Box E. Employee’s full legal name
Box F. Employee’s address
Box 1. Employee’s amount of wages, tips, and other compensation. This reports total taxable wages or salary. Taxable fringe benefits will also be included here, including group term life insurance; however, it does not include any pre-tax benefits, such as savings contribution to a 401(k) plan, 403(b) plan, or health insurance.
Box 2. Employee’s amount of money withheld for federal income taxes. This reports the total withheld amount from paychecks.
Box 3. Employee’s amount of Social Security wages. This reports the total amount of wages subject to Social Security tax.
Box 4. Employee’s amount of Social Security tax withheld. This reports the total amount of Social Security taxes withheld from your paycheck. It is important to note that the Social Security tax has a flat rate of 6.2 percent on wage income up to $128,400.00 as of 2018.
Box 5. Employee’s amount of income eligible for the Medicare tax. There is no maximum wage base for Medicare.
Box 6. Employee’s amount of Medicare tax withheld. The flat rate for the Medicare tax is 1.45 percent of your total Medicare wage as of 2018.
Box 7. Employee’s Social Security tip income. Leave this section empty if there are no reports regarding any tip income.
Box 8. Employee’s allocated tip income assigned by the employer. This reports any tip that was allocated by an employer.
Box 9. Verification code, if involved in a verification code program. Leave this box blank, if not applicable.
Box 10. Total amount of money for dependent care. This reports any amount that might have been reimbursed for dependent care expenses through a flexible spending account or the dollar value of dependent care services provided by an employer.
Box 11. Non-qualified plans. If applicable, use this box to report money paid to an employee as part of a non-qualified compensation plan or non-government pension plan.
Box 12. Deferred compensation, including savings or retirement plans. Indicate for each form if an employee participates in a retirement or non-qualified plan with his or employer.
Box 13. Check the appropriate boxes. Statutory employees are independent contractors under the common-law rules whose wages are not subject to income tax withholding; thus, mark the “Statutory employee” option, if applicable. If an employee participated in his or her employer’s retirement plan during the tax year, the ‘Retirement plan” checkbox must be marked. Lastly, if an employee received third-party sick pay under his or her employer’s third-party insurance policy instead of receiving directly from the employer as part of the regular paycheck, the “Third-party sick pay” option must be marked
Box 14. Additional information that must be reported. An employer may report additional tax information using this section. If any amount is reported, it should have a corresponding description of what the tax is for. Information such as union dues, employer-paid tuition assistance, or after-tax contributions to a retirement plan may be mentioned in this box.
Box 15. Employer’s state ID number
Box 16. Taxable wages earned in the stater
Box 17. Amount of state income tax withheld.
Box 18. Amount of employee’s wages subject to local, city, or other taxes. This section should indicate the total amount of wages subject to local, city, or other state income taxes.
Box 19. Amount of local income tax withheld. This reports the total amount of taxes withheld from your paycheck for local, city, or other state income taxes.
Box 20. Locality or city being paid locally. This should have a brief description of the local, city, or other state tax being paid. The description may identify a particular city or a state tax.
It is necessary to double check all the information, including the math, spelling of all names and address, and identification codes. Accurate entry of wages and tips is extremely important to avoid surprises during the tax season. One could end up owing money to the IRS or if an employer overreport a deduction, an employee will end up with a smaller take-home salary, but a larger tax refund at the end of the year. In terms of legibility, use a clear font that is easy to read and black ink if you will accomplish the form using a computer. If you will answer the form by hand, make sure to write clearly.
There will be six copies of the W-2 in total and distributed as follows:
Copy A goes to the Social Security Administration. It is usually printed on a special laser-scannable red form.
Copies 1 and 2 go to the state, city, or local tax department
Copy B is for the employee’s federal tax return
Copy C is for the employee’s records
Copy D is for the employer’s records
When are the deadlines for filing the W-2 forms?
Take note of the following key date to help you file W-2 forms on time:
1 January and 3 December are the start and end of the tax year respectively.
31 January is the deadline for submitting an employee’s W-2 form for the previous tax year.
28 or 29 February is the deadline for paper filing of employer’s Copy A of W-2 form.
31 March is the deadline for online filing of employer’s Copy A of W-2 form.
Common error on W-2 forms
According to the IRS, you should follow these guidelines to avoid the most common errors that cause processing delays:
Do not download Copy A of W-2 form from IRS.gov and file with SSA.
Do not delete decimal point and cents from entries.
Do not write entries using a light-colored ink; do use only black ink.
Do not make entries that are too small or too large; the IRS recommends that you use 12-point Courier font.
Do not add dollar signs to the money-amount boxes. They have been removed from Copy A and are not required
Do not inappropriately check the “Retirement plan” checkbox in Box 13.
Do not misformat the employee’s name in Box E. Enter the employee’s first name and middle initial in the first box, his or her surname in the second box, and his or her suffix in the third box, if applicable.
Do not enter an incorrect employer identification number (EIN) or the employee’s SSN for the EIN
Do not cut, fold, or staple Copy A paper forms mailed to SSA
Who must file the W-2 form?
If you have one or more employees to whom you have made payments, including non-cash payments, for the services rendered, you must file the W-2 form. Accomplish and submit the form for each employee who any of the following conditions apply:
You withhold any income, social security, or Medicare tax from wages, regardless of the amount; o
You would have had to withhold income tax if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding on W-4 form; or
You paid $600.00 or more in wages even if you did not withhold any income, social security, or Medicare tax.
After filing the W-2 form, you can expect to receive it after several days up to weeks; however, if you have not received your form by mid-February, you can call the IRS for assistance.