An Employer’s Guide to the W-2 Form
Every government’s revenues are majorly raised from taxes. Individuals and companies remit their taxes to the government directly. Government also taxes us through taxes included in the prices of the goods we buy. Agreements are signed between employees and employers when the employee gets hired. The agreement for the employer to remit taxes on behalf of the employee is one of the agreements between an employer and the employee.
When a company pays taxes on behalf of its employees, the W-2 form has to be given. The employee whose tax has been remitted as well as the government both get the W-2 form from the employer. Details of the employees earning are given here. Each of the employees of the company has to get a form prepared for them. As an employer, you, therefore, need to know the information to include in a W-2 form for your employees and the government.
Information filled in the W-2 categories is divided into three categories. Incorrectly filled forms may lead to penalties or the employer paying incorrect taxes to the government. The form requires one to provide information such as the employee and employer terms, earning and tax details and finally any crucial information. The employers task is reduced because there are standard forms available hence no need to make new ones. All you need to do is to download them or get them from your tax agent.
The first section of the W-2 form involves information about the employee and employer. Detailed description of the employee is required here. The information is to be filled in the allocated boxes. Some of the information to be supplied includes social security number of employee, the address of both the employer and employee, full names of the employee, employee work number as well as his payroll number. To avoid issues like double taxation and form duplication, the employer should fill this section correctly.
The employer then fills the financial information. The financial details is the most important part 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.