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An Employer’s Guide to the W-2 Form

Taxes are the method each government uses to generate its revenues. Taxes are remitted by individuals and companies directly to the government. There is also another category of taxes which are included in the prices of goods we buy. It is normal for an employee and the employer to sign an agreement when one is employed. The agreement for the employer to remit taxes on behalf of the employee is one of the agreements between an employer and the employee.

Companies paying taxes on behalf of their employees should give the W-2 form. The employee whose tax has been remitted as well as the government both get the W-2 form from the employer. It gives a detailed information on the earnings of the employees. The company has to prepare a form for each of its employees. The information to be included in the form is thus one crucial thing the employer has to know.

The W-2 Form is divided into three major categories. The categories are all to be filled correctly by any employer as any mistakes may lead to penalties or payment of wrong amounts of taxes. These three categories of information include the description of employee and employer terms of employment, earning and tax information and a section to fill any extra information. Standard forms are available and an employer does not, therefore, need to go through the hustle of creating new forms. The forms are available for download and you can also get them from your tax agent.

Details of the employee and the employer as well as their relationship is included in the first section of the W-2 form. Here, detailed information of the employee must be given. All information to be given is to be filled in the boxes provided in the form. In the boxes, information provided should include the social security number of employee, the address of both the employer and employee, full names of the employee, employee work number as well as their payroll number. Correct filling of this section is crucial as it eliminates issues such as double taxation and duplication of forms.

The employer then fills the financial information. The financial details is the most important part of the W-2 form. The financial details included will be a summation of all the employees’ earnings in the entire year. Details of the employee’s payment per month are provided in full. These will include all the wages of the employee in the year and tax the employer has remitted to the government on behalf of the employee per month. The form W-2, however, does not include allowances the employee gets that are not included in the employee’s salary. After filling these two sections, the employers have a portion of the form to fill any additional information that may be necessary.

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