How to Prepare W-2 Forms
The Internal Revenue Service requires every organization to submit a W-2 form on behalf of their workers. When preparing this document, they must indicate the amount of money the worker received as well as the amount of money that was deducted from their wages.
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. 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.
As soon as you identify which category your worker belongs to, the other thing you ought to do is to visit the IRS website so that you can request for the W-2 form.Before you fill the W-2 document, it is vital to have your worker’s pay stub details.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. 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.
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 SSA gets Copy A, and the State tax department gets Copy 1, your employee gets Copies B, C and 2 and you must keep Copy D for your record.
On the other hand, before you prepare the W-2 document, it is recommendable that you create a control number for every employee.This unique control number allows you to fill the W-2 forms in six parts easily as different employees have different control numbers.You can choose to create the control number manually, or you can generate it electronically. Whichever way you choose, make sure the control number has both letters and numbers. For instance, you can decide to use A1B2 for employee number 1.
Do not forget to counter check where to fill the needed information 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.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. Filling the W-3 form will not be a hard task as it virtually contains the same data in the W-2 form.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.