How to Create W-2 Forms
The Internal Revenue Service requires every organization to submit a W-2 form on behalf of their workers. 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.
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.
Once you know the worker’s status, the next step you need to do is to obtain the W-2 forms from the IRS site. Make sure you have the employee’s payroll information. Some of the payslip details comprise the name of the worker, his or her ID number, location and the social security 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. Some of the information you are required to fill on the W-2 form comprises of the enterprise name and location in addition to the enterprise identification number which is given to you by the IRS so that they can recognize your enterprise for taxation reasons.
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. By parties, I mean the SSA, City tax department, your worker and the business owner. 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.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 choose to create the control number manually, or you can generate it electronically. In any case, be sure to include scripts and symbols in your control numbers.As such, you can have a control number like E1F3 to stand for one employee.
Remember that the W-2 requires you to fill all these facts in the correct spaces provided. So, ensure that you follow the instructions given. Moreover, make sure you use a legible black font when filling these forms.
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. 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. Finally, visit the IRS website and obtain copies of the W-2 and W-3 forms.