An Employer’s Guide to the W-2 Form
Taxes are the method each government uses to generate its revenues. Individuals and companies remit their taxes to the government directly. Other forms of taxes by the government include those attached to the prices of commodities we buy. It is normal for an employee and the employer to sign an agreement when one is employed. One such agreement between an employer and employee is the agreement that the employer should remit taxes on behalf of the employee to the government.
The W-2 form is a compulsory thing to sign whenever an employer pays taxes on behalf of the employee. The W-2 form is given by an employer to both the employee and the government. Here, the information of the employee’s earnings are given. The company has to prepare a form for each of its employees. The employer, therefore, has to know all the information to include in the W-2 form.
There are three divisions of the w-2 forms. Mistakes such as wrong tax amounts and risk of penalties are the reasons why the information in this form should be filed correctly. The form requires one to provide information such as the employee and employer terms, earning and tax details and finally any crucial information. Standard forms are available and an employer does not, therefore, need to go through the hustle of creating new forms. To get the forms, you may download them or get them from your tax agent.
The W-2 first section involves the details of the employee, the employer or their relationship. Detailed description of the employee is required here. All information to be given is to be filled in the boxes provided in the form. In the boxes, information provided should include the social security number of employee, the address of both the employer and employee, full names of the employee, employee work number as well as their payroll number. Correct filling of this section is crucial as it eliminates issues such as double taxation and duplication of forms.
Next the employer is to fill the financial details. This is the most important section of the W-2 form. Details of this section are the earnings made by the employee during the entire year. Full details of the employee’s payment as the employee got paid per month are all included in this section of the form. The employer includes details of the employee about wages such as how much tax they have remitted on behalf of the employee as well as the total earnings of the employee. Extra allowances not included in the employee’s salary are not part of the details provided in the W-2 form. The employer is then given a portion in the form to provide any extra information that may be necessary for the tax filing.