Know the Details of a W-2 Form
Taxes are the method each government uses to generate its revenues. 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. Agreements are signed between employees and employers when the employee gets hired. The agreement for the employer to remit taxes on behalf of the employee is one of the agreements between an employer and the employee.
The W-2 form is a compulsory thing to sign whenever an employer pays taxes on behalf of the employee. The employee whose tax has been remitted as well as the government both get the W-2 form from the employer. Here, the information of the employee’s earnings are given. The form is prepared for each of the employees of the company. As an employer, you, therefore, need to know the information to include in a W-2 form for your employees and the government.
The W-2 Form is divided into three major categories. Incorrectly filled forms may lead to penalties or the employer paying incorrect taxes to the government. The form requires one to provide information such as the employee and employer terms, earning and tax details and finally any crucial information. Standard forms are available and an employer does not, therefore, need to go through the hustle of creating new forms. All you need to do is to download them or get them from your tax agent.
The first section of the W-2 form involves information about the employee and employer. Detailed description of the employee is required here. There are boxes allocated for all the information required for the employee. Some of the information to be supplied includes social security number of employee, the address of both the employer and employee, full names of the employee, employee work number as well as his payroll number. 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. How much money the employee made in the entire year is included in this section of the form. The employee’s full payment details as paid every month should be included here. The employer includes details of the employee about wages such as how much tax they have remitted on behalf of the employee as well as the total earnings of the employee. 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.