How to Create W-2 Forms
The Internal Revenue Service requires every organization to submit a W-2 form on behalf of their workers. When creating this report, the employer must show the salaries and tax deductions received by each worker.
Consequently, before you generate a W-2 form, it is of paramount importance to determine whether your employee is a freelancer or a permanent worker in your enterprise so that you can protect your organization. However, if you do not know the status of your employees, make sure you visit the IRS website and complete an IRS form that will determine the worker’s status.
After that, order the W-2 forms from the IRS website. Ensure that you have your worker’s payslip details before you start filling the W-2 form. You should have your employees’ name, address, social security number and identification card number.More so, ensure you obtain the employee’s total income wages, Social Security wages, Medicare wages and any other tax deducted from the employee.
Apart from having the employees’ details, you also need to have your employers’ details at hand. This includes your business name and address as well as your business ID number which is assigned by the IRS that is used to identify your business for taxation purposes.
As soon as you gather all these information, the IRS requires you to fill the six W-2 forms which are intended for various individuals.Here, the parties involved are the SSA, State tax unit, your employee and yourself. 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.
Conversely, when creating the W-2 reports, it is advisable to have a control number for each worker. The control number enables you to keep track of each employee as you fill out the multiple W-2 forms since each employee’s control number is different. You can opt to guess a control number and allocate it to any employee, or you can prepare it automatically.Whichever way you choose, make sure the control number has both letters and numbers. As such, you can have a control number like E1F3 to stand for one employee.
Keep in mind this information is filled in the boxes provided on the W-2 forms. Therefore, be sure to go through all the details written in the W-2 form before you embark on filling the form.Furthermore, for legibility purposes make sure you fill the form using a black pen.
As soon as you are done with W-2, it is vital to fill another form known as W-3 which backs up the W-2 form.You must submit the form W-3 together with W-2 to the SSA. The W-3 form is just a copy of the W-2 form, therefore; filling the W-3 document will be an easy task. Finally, visit the IRS website and obtain copies of the W-2 and W-3 forms.