Know the Details of a W-2 Form
Every government makes its revenues from taxes. Individuals and companies remit their taxes to the government directly. Government also taxes us through taxes included in the prices of the goods we buy. Agreements are signed between employees and employers when the employee gets hired. One such agreement between an employer and employee is the agreement that the employer should remit taxes on behalf of the employee to the government.
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. Details of the employees earning are given here. 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. The categories are the description of employee and employer terms and relationship, earning and tax information and finally any other relevant additional information. The employers task is reduced because there are standard forms available hence no need to make new ones. To get the forms, you may download them or get them from your tax agent.
The W-2 first section involves the details of the employee, the employer or their relationship. All the necessary information of the employee must be provided here. The information is to be filled in the allocated boxes. 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. To avoid issues like double taxation and form duplication, the employer should fill this section correctly.
The employer then fills the financial information. Among the three sections of the W-2 form, this section is the most crucial. How much money the employee made in the entire year is included in this section of the form. The employee’s full payment details as paid every month should be included here. 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. Extra allowances not included in the employee’s salary are not part of the details provided in the W-2 form. There is then an extra space for filling in any extra information that may be relevant to the tax issue.