How to Create W-2 Forms
The Internal Revenue Service requires every organization to submit a W-2 form on behalf of their workers. On this form, the employer must fill how much money they paid an employee and how much money was withheld from 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. 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.
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.Ensure that you have your worker’s payslip details before you start filling the W-2 form. This includes the name, ID number, address and the social security number of the employee. In addition to that, make sure you have the total income the employee earns and total taxes withheld which include the Social Security taxes, income taxes and Medicare taxes beforehand.
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.
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.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 assign a control number to each employee by yourself or your payslip preparation software can create this number electronically. 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.
Do not forget to counter check where to fill the needed information on the W-2 forms.So, ensure that you follow the instructions given. 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. Form W-3 contains the same information as W-2, so it is not difficult to complete. Lastly, from the IRS website, make sure you print out the W-2 and W-3 Forms.