3 Key Tips to Filling Out W-2 Forms

w-2 form

If you’re worried about tax season, fret not.

Filing taxes can be a stressful experience for both employers and employees, especially if you don’t know what you’re doing. As an employer, you’re responsible for providing employees with special forms that they’ll use throughout the filing process.

Most people have heard of and received W-2 forms but aren’t sure how to fill them. While they require a lot of information about income and taxes, you won’t need to stress about the numbers. Providing that you’ve been keeping track of wages, you’ll have no problem filling out W-2 forms!

Keep on reading to learn more about W-2 forms and 3 tips on how to fill them.

1. Understand What a W-2 Form Is

W-2 forms are some of the most important forms you can get from an employer. They essentially outline how much you’ve made throughout the year. Along with your income, W-2 forms show how much money was deducted from your income and sent to the IRS.

Most people need W-2 forms, but those that work independently will need a 1099 form. Those that are employed by companies and have made at least $600 throughout the tax year are given W-2 forms by January 31st, the deadline in which employers can provide them.

Those that haven’t made more than $600 will still be given a W-2 if any of their income had deductions for Medicare, Social Security, and other taxes.

W-2 form should not be confused with W-4 forms, which are forms that are completed by employees. Many people think they’re filling out W-2 forms, but instead, they’re using the information from the W-2 for their W-4 forms.

2. Know How Many You Need

If you’re an employer, you’ll need to produce 6 copies of each W-2 form. 3 copies will go to the employee, 2 to the government, and 1 will remain with you (Copy D).

To be more specific, the copies that go to the government are Copy A and Copy 1. Copy A is sent to the Social Security Administration (SSA), whereas Copy 1 is sent to the local tax department of the employee. The employee will keep Copy C and file their taxes with copies B and 2.

W-2 forms must be mailed to employees, so you cannot provide them with digital copies. Although they may make a digital copy for themselves, the forms ultimately need to be mailed to the government to be counted. You can find a printable W2 form 2019 and other years from the IRS.

3. Filling Out Your W-2 Forms

Filling out W-2 forms for employees isn’t as difficult as many people make it out to be. While it may take you some time to understand how to fill out a W-2 form, you’ll quickly realize that the process doesn’t take much time.

To start, you’ll need to insert the employee’s social security number at the top. You’ll also need to put your identification number, name, and mailing address below that.

After filling those out, you’ll need to start filling in the numbered boxes:

Boxes 1-10

Within these boxes is where you’ll put the information relating to your employee’s annual earning from both wages and tips (box 1). Keep in mind that taxes should be included in that number, but don’t include deductions from IRAs. 

In boxes 2, 4, and 6, you’ll need to fill out the federal income taxes, Social Security taxes, and Medicare taxes that you’ve deducted in their respective boxes. 

If your employee receives any tips, write down how much they’ve reported to you in box 7 and how much they’ve actually received in box 8. You don’t have to worry about box 9 as it hasn’t been used since 2011. 

In box 3, indicate how much of their income was taxed for Social Security. In this box, you don’t want to include the income made from tips. 

Boxes 11-14

If your employee is enrolled in a retirement plan, such as a 457(b) plan, you’ll need to put how much of their money goes to that plan in box 11. Box 12 is used for a variety of codes and amounts that vary depending on what benefits they have. You’ll find on the back of the W-2 a list of codes and directions for this step.

In box 13, you’ll indicate, if applicable, that the employee has a retirement plan, is a statutory employee, and has received sick pay from a third-party. If your company hires independent contractors, they may count as statutory employees. For example, a full-time salesperson that works for you is a statutory employee.

Boxes 15-20

These boxes don’t require as many numbers as the others. In box 15, you’ll fill out your state and employer state ID number if your state requires it. All of your employee’s earnings that are taxable by the state will go into box 16. The money that’s already been deducted goes into box 17.

The earnings that are eligible for local taxation will go into box 18, and then the money that’s been deducted goes into 19. Lastly, box 20 is where you’ll put the name of the place that the taxes are going to.

Filling out W-2 Forms Has Never Been Simpler

Although employers have already sent W-2 forms for the 2019-2020 tax year, you’ll need to be prepared for next year. With this article, you’ll be ready to start filling out W-2 forms for employees without any issues.

Keep in mind that if you have a large number of employees, you can hire someone else to fill them out so that you can reduce your workload.

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