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How to Create W-2 Forms
The Internal Revenue Service mandates every business owner to create a W-2 form for their staff members.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.
So, if you want to create a W-2 form, it is essential to know the status of your employee whether he or she is an independent contractor or is a permanent employee to keep your business out of trouble. 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.You should have your employees’ name, address, social security number and identification card number.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.
Once you have that information, the next thing you need to do is to fill the six forms attached to the W-2 form which you must submit to all the parties involved. Here, the parties involved are the SSA, State tax unit, your employee and yourself. You should provide Copy A to the SSA, Copy 1 to the State tax branch, Copies B, C and 2 to the worker and keep Copy D for the business.
On the other hand, before you prepare the W-2 document, it is recommendable that you create a control number for every employee.This control number will help you in differentiating different employees as each employee has a unique control number when you are filling the six forms. You can assign a control number to each employee by yourself or your payslip preparation software can create this number 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.
Remember that the W-2 requires you to fill all these facts in the correct spaces provided. For that reason, make sure that you read the W-2 form carefully before you start filling it. Furthermore, for legibility purposes make sure you fill the form using a black pen.
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. W-2 forms and W-3 forms are supposed to be presented at the same time to the SSA. The W-3 form is just a copy of the W-2 form, therefore; filling the W-3 document will be an easy task. Lastly, from the IRS website, make sure you print out the W-2 and W-3 Forms.