How to Create W-2 Forms
The Internal Revenue Service mandates every business owner to create a W-2 form for their staff members.When creating this report, the employer must show the salaries and tax deductions received by each worker.
For that reason, if you are preparing a W-2 form, it is crucial to know if the individual is a worker or an independent contractor so that you can safeguard your enterprise. Nevertheless, if you cannot tell if your worker is an independent contractor or an employee, then you should log into the IRS website and fill the IRS form that determines the status of the individual in your organization.
After that, order the W-2 forms from the IRS website. Make sure you have the employee’s payroll information. This includes the name, ID number, address and the social security number of the employee. Further to that, make sure you have the total wages the employee is entitled to, total federal income tax deducted, cumulative social security tax withheld, total Medicare tax withheld and any other state or city income tax withheld.
Besides you need to include all the information about your business. Some of the information you are required to fill on the W-2 form comprises of the enterprise name and location in addition to the enterprise identification number which is given to you by the IRS so that they can recognize your enterprise for taxation reasons.
With that in mind, the W-2 form is filled in six copies which you are supposed to give different people. The individuals who receive these forms include the SSA, State tax office, your worker and the organization itself.The copies are distributed as follow; Copy A goes to SSA, Copy 1 goes to the City tax unit, Copies B, C and two are given to the worker, and Copy D is for the business.
But before you fill these forms, make sure you generate a control number for your employee. This control number will help you in differentiating different employees as each employee has a unique control number when you are filling the six forms. You can opt to guess a control number and allocate it to any employee, or you can prepare it automatically.Either way, ensure that the control number contains alphabets and figures. As such, you can have a control number like E1F3 to stand for one employee.
Remember that the W-2 requires you to fill all these facts in the correct spaces provided. Therefore, be sure to go through all the details written in the W-2 form before you embark on filling the form.Moreover, make sure you use a legible black font when filling these forms.
Once you are through with filling the W-2 form, you need to fill Form W-3 which supports the information on the W-2 form. You must submit the form W-3 together with W-2 to the SSA. Form W-3 contains the same information as W-2, so it is not difficult to complete. Once you through filling these documents, the last thing you should do is to print out copies of W-2 and W-3 forms on the IRS site.