How to Prepare Tax Documents for Your W2 Employees

It’s tax season and your employees are preparing their documents to present to their accountants. And no doubt, they are eagerly awaiting you to send them their W2 Form.

But you are stuck; you want to know how to prepare this vital document for your W2 Employees.

Don’t worry, we have got you covered:

Tax Documents For W2 Employees

Your W2 Employee is either a part-time or full-time worker who has their taxes (income, medicare, social security) deducted from their wages. This deduction is the responsibility of the employer. The W2 will reflect wages earned and taxes deducted.

Before getting started, make sure that you collect the following:

• W2 Form
• W3 Form
• Payroll figures (wages) for employees
• Deduction figures for employees
• Payroll software
• A printer

Now let’s dive right in:

Preparing The Form

While you can manually enter information into the W2 Form, we recommend using the automated W2 Form creator by PayStubs.net

During the onboarding process, your employees will have provided their full legal name, address, and social security number on Form W4. Before providing a W2, confirm with your employees that all the information which they initially provided is still accurate – after all, their address may have changed within the year.

Make sure you also have your company’s state tax ID number handy. Depending on your state, you may be required to pay state income tax.

Filling The Form

Now that you have the W2 Form and the relevant information, it is time to start filling it in. Using a black ink pen is highly recommended.

Here are the steps for filing in the basic information:

1. Enter the employee’s social security number in Box A. The number should have three numbers, followed by a dash, two numbers, followed by a dash, and then the final four numbers.
2. Enter your Employment Identification Number (EIN) into Box B. The number should be written with the first two digits, followed by a dash, and then the remaining seven digits.
3. In Box C fill in your company’s name and its full address.
4. Your control number is entered in Box D. You can automatically generate this number using your payroll software.
5. Boxes E and F are for filling in the employee’s name and their address

Next, you are going to fill in the financial information:

1. Box 1: Fill in the wages, tips, and any additional compensation your employee earned which is subject to federal income tax.
2. Box 2: Write in the total amount of federal income tax that was withheld.
3. Box 3: Fill in the employee’s total wages which are subject to social security tax.
4. Box 4: Fill in the amount of social security tax withheld.
5. Box 5: Fill in the amount of your employee’s Medicare wages and tips.
6. Box 6: Enter the Medicare tax that has been withheld from the employee.

This should be it for most employees. There are additional fields that may have to be filled depending on your employee’s situation. Consult with your tax accountant to see if other portions of the W2 need to be filled.

File Away!

Make sure your W2’s are given to your W2 employees on time so that they can file their returns on time. W2’s are not as complex as you would think and soon enough you’ll become an expert.

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