An Employer’s Guide to the W-2 Form
Every government makes its revenues from taxes. Direct remittance of taxes to the government is done by an individual or companies. Other forms of taxes by the government include those attached to the prices of commodities we buy. When an employee gets employed by a firm, they are required to sign agreements with the employer. 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 W-2 form is given by an employer to both the employee and the government. It gives a detailed information on the earnings of the employees. The form is prepared for each of the employees of the company. The information to be included in the form is thus one crucial thing the employer has to know.
There are three divisions of the w-2 forms. The categories are all to be filled correctly by any employer as any mistakes may lead to penalties or payment of wrong amounts of taxes. 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. To get the forms, you may download them or get them from your tax agent.
Details of the employee and the employer as well as their relationship is included in the first section of the W-2 form. All the necessary information of the employee must be provided here. All information to be given is to be filled in the boxes provided in the form. Social security number of employee, address of both the employer and employee, full names of the employee, employee work number as well as his payroll number are some of the information that should be filled in the first section of the W-2 form. To avoid issues like double taxation and form duplication, the employer should fill this section correctly.
Next the employer is to fill the financial details. The financial details is the most important part of the W-2 form. The financial details included will be a summation of all the employees’ earnings in the entire year. The employee’s full payment details as paid every month should be included here. Details included by the employer include; the tax payments made by the company on behalf of the employee and also all the money the employee has earned in the entire year. Extra allowances not included in the employee’s salary are not part of the details provided in the W-2 form. There is then an extra space for filling in any extra information that may be relevant to the tax issue.