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 creating this report, the employer must show the salaries and tax deductions received by 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. Nonetheless, if you are unsure whether your worker is an employee or a freelancer, you do not have to worry as the IRS site will guide you in determining the worker’s status once you fill an IRS form.
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. Further to that, make sure you have the total wages the employee is entitled to, total federal income tax deducted, cumulative social security tax withheld, total Medicare tax withheld and any other state or city income tax withheld.
Besides you need to include all the information about your business. You must disclose your organization name and whereabouts as well as your business ID number that is provided to you by the IRS so that they can monitor how much tax your business pays.
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. The copies are distributed as follow; Copy A goes to SSA, Copy 1 goes to the City tax unit, Copies B, C and two are given to the worker, and Copy D is for the business.
Conversely, when creating the W-2 reports, it is advisable to have a control number for each worker. This unique control number allows you to fill the W-2 forms in six parts easily as different employees have different control numbers.You can opt to guess a control number and allocate it to any employee, or you can prepare it automatically.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.
Do not forget to counter check where to fill the needed information on the W-2 forms.For that reason, make sure that you read the W-2 form carefully before you start filling it. What’s more, fill the W-2 form using a black font so that it can be readable.
After you fill the W-2 document, the next form you should fill is the W-3 form that confirms that the information you recorded on the W-2 form is correct. You must submit the form W-3 together with W-2 to the SSA. Filling the W-3 form will not be a hard task as it virtually contains the same data in the W-2 form.Lastly, from the IRS website, make sure you print out the W-2 and W-3 Forms.