A Step-by-Step Guide to Filling Out the W2 Form
The W-2 is dim-witted and straightforward. You enter information that is already available from payroll and personnel records. You will besides need to have some information about your business, such as an Employer Identification Number ( EIN ) and, in most cases, a State ID Number .
The fields on each W-2 form are the lapp. however, employers fill out the forms differently, depending on factors like which state they operate their occupation in and whether there are tax-exempt benefits .
The independent challenge to filling out the form correctly is to avoid errors when entering names and numbers in the fields. Always double-check the boxes to make sure you haven ’ thymine entered the incorrect figures or misspelled any employee names or addresses .
When in doubt about current tax regulations that may impact the withhold condition of your employees, you may want to consult a tax technical.
IRS Publication 15, the Employer ’ s Tax Guide, is the seminal guide to filling out the imprint. What follows is a pared-down, childlike guide that walks you through each of the knowing and number fields on the W-2 kind, providing a brief explanation when necessity .
The knowing fields, located on the left-hand side of the W-2 form, provide basic identification for both the employer and the employee .
An exception is the state ID number, which goes in a numerically labeled box at the bottom of the human body, along with the other state and local tax information .
Field a: Employee’s Social
Nine-digit social security issue of the employee for whom this W-2 form is being prepared for .
Field b: Employer Identification
An Employer Identification Number ( EIN ) is the unique nine-digit number that the IRS impute to businesses. You must have an EIN in order to hire employees .
Field c: Employer’s Name,
Address, and ZIP code.
You need to enter the wide, legal name you used when you registered your corporation or LLC. besides the complete address of your business, including the slide fastener code .
Field d: Control Number
The dominance number identifies each employee ’ second singular W-2 in the party ’ randomness records. The numbers are automatically generated by your company ’ sulfur payroll march software .
Field e-f: Employee’s Name,
Address and ZIP code.
Make sure you have entered the current address of each employee. You may need to double-check to make certain this data is accurate .
The number fields run in a double column on the right-hand side of the W-2 form and continue across the bottom of the form. Wages and federal tax information is contained in the right-hand column .
The bottom field displays state and local tax information in a series of horizontal total fields. It is divided by a dashed line to provide more than one quad for entering data .
If you have employees working for your occupation in more than one vicinity or department of state, you will need to fill out withholdings for each vicinity, utilizing the space on either side of the dashed line .
Field 1: Wages, Tips, Other
This field reports the entire of all your employee ’ south taxable wages or wage, including bonuses and taxable fringe benefits like group term life insurance. It does not include pre-tax benefits, such as contributions to a 401 ( kilobyte ) or health indemnity design .
Field 2: Federal Income Tax
How much federal income tax you withhold from a given employee ’ south paycheck is depends on the number of withholding allowances they designated on their W-4 phase .
Field 3: Social Security Wages
only a part of each employee ’ mho sum wages are subject to tax from the Social Security Administration. Above a certain doorway, $ 128,400 in 2018, this alleged payroll tax stops. therefore, no employee should have a engage larger than $ 128,400 entered in this field .
You don ’ deoxythymidine monophosphate include employee tips in this field. See Field 7 .
Field 4: Social Security
Employers and employers contribute equally to this tax, paying 6.2 percentage each of the employee ’ s engage up to the allowable doorsill sum .
The name in Field 4 should not exceed the taxable threshold x employer ’ second share, or $ 7,960.80 in 2018 .
Field 5: Medicare Wages and Tips
The figure you enter in this field reflects the total taxable income each employee earned with your company. Unlike Social Security, there is no utmost threshold .
Field 6: Medicare Tax Withheld
Employers and employees pay matching tax rates into Medicare — 1.45 percentage each .
Good to Know : not only is there no upper doorsill on Medicare earnings ; highly compensated individuals must pay an extra .9 percentage above the standard rate, or 2.35 percentage for couples making over $ 250,000 a year. only the employee pays this extra tax, however. The employer requital remains fixed at 1.45 percentage .
Field 7: Social Security Tips
You include employee ’ south reported tips in this battlefield. When added to Field 3, the sum should equal the number in Field 1.
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Field 8: Allocated Tips
If your clientele is a large food or beverage institution, and the sum of tips an employee reported to you fell below the IRS ’ s approved share pace, you may assess extra compensation to your employees in the form of allocate tips .
Unlike any tips reported in Field 7, this sum is not included in the amount of total income reported in Field 1 .
Field 9: Advance EIC Payment
This sphere is a keepsake of a tax policy that no longer is relevant and should always remain blank .
Field 10: Dependent Care
You use this field to report income you reimbursed an employee for dependant care expenses, including through a flexible spend account .
Field 11: Nonqualified Plans
This field is where you report any amounts you distributed to your employees from a non-government segment 457 pension plan or a non-qualified submit compensation plan
This come should be included as taxable income in Field 1 ampere well .
Field 12: Deferred Compensation
There are numerous forms of submit recompense recognized by the IRS, each of which has its own tax code. The W-2 shape mandates you to report as many of these forms of compensation as are relevant to your employees in Field 12 .
Some of the more common are group condition liveliness policy benefits in overindulgence of the $ 50,000 worth you can provide as a tax-exempt benefit and the non-taxable helping of temp disability or sick pay up. The IRS recognizes roughly 30 different forms of submit compensation .
Field 13: Checkboxes for Statutory
Employees, Retirement Plan, and Third Party Sick Pay
In this field, you check any of the three boxes that are relevant to the employee in doubt .
- A statutory employee is
someone who works for your company but doesn’t receive compensation in the form
of a regular paycheck — for instance, they work 100 percent on commission.
- You check “Retirement
Plan” if your employees have access to a 401k or 403b at work, which may limit
their ability to get tax incentives normally associated with an IRA
- ”Third Party Sick Pay”
refers to compensation your employee received from an outside party, such as an
Field 14: Other
You can use this field to report any compensation that doesn ’ thymine descend into the other categories listed on the W-2 kind .
Field 15: State ID Number
State ID numbers function in a lot the same way as EINs, to give your business a recognizable identity for tax purposes. The country ID act is only valid in that state .
Good to Know : Whether you need a state ID for your clientele depends on several factors, including how the occupation handles income and employment tax .
Field 16: State Wages, Tips, Etc.
This airfield is where you report the income you paid to the employee that is taxable at the state flat .
Good to Know : If they worked for your ship’s company in more than one department of state, you must separate the incomes out, placing the income taxable to each country on a freestanding line. If you do business in one of the seven U.S. states that has no income tax, this sphere will be lacuna .
Field 17: State Income Tax
This airfield shows the total measure of state income tax you withheld from your employee ’ second checks over the course of the year .
Field 18: Local Wages, Tips, Etc.
You report all income that is subject to tax by your vicinity. This figure may be unlike than the figure in Field 16 .
Field 19: Local Income Tax
If one or more of the localities you do business in requires employees to pay local income tax, this is the discipline where you report the amount .
Field 20: Locality Name
You ’ ll enter a brief description of the city or township that withheld taxes .
Where Do I Send the Completed Copies of the W-2 Form?
In full, there are six copies of the form that need to be distributed .
- Copy A goes to the Social Security Administration for their records.
- Distribute Copy 1 to the state, city, or local tax department that has withheld taxes.
- Copies B, C, and 2 go to the employee so that they can submit these copies along with the appropriate tax forms.
- Copy D is for your company’s records; you should keep it on file for at least four years.
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