As the new tax season approaches, employees and employers will be flinching to prepare the different forms and filings needed for the tax returns. Nevertheless, there are a few documents that employers must submit. The deadline for one of these forms, the W-2 form, is sooner than most.
Form W-2, also referred to as a wage and tax statement, is a form that every employer completes annually. The form summarizes your company’s income and taxes for the previous year.
What is Form W-2?
For an employer that has only a small number of employees and does not have a large number of salaries to pay, the Form W-2 for the end of the calendar year is the most critical form to fill out. Form W-2 is used to prepare the tax returns for that year. All of the employees who worked for the company during that year are required to fill out their Form W-2. Form W-2 is a report that contains information about the amount of wages, tips, commissions, bonuses, and other compensation earned in the tax year. Form W-2 is mandatory for every employer, regardless of size, to be submitted to the IRS.
The IRS has specific instructions on Form W-2, the form used to report employees’ earnings to the government. Form W-2 has three sections:
Employee’s Name And Address: This one is pretty self-explanatory. It is the first line of a Form W-2, and the form’s primary purpose is to ensure the name, address, and SSN of employees match their Form W-2.
Employer’s Name And Address: Similar to the employee’s address, this line asks for the employer’s name, address, and SSN.
Employer’s Amount Paid To Employees: This is the biggest section of a Form W-2, which asks the employer to report earnings to the government.
The Form W-2 is required by law to be delivered to the employer by 31 January of every year. As a taxpayer, you need to ensure that your employer submitted this form along with your Form W-2 by 31 January 2022.
The form is filed to report the income, taxes withheld, and other deductions for the 2022 calendar year. Most of us file on time, but have you ever thought about what would happen if you didn’t? That’s right, the IRS will send out letters demanding you pay the taxes you are due. You may be thinking that you can’t afford to pay the tax, but remember that the employer is sending out the letter to you because they want to know what income they paid you.
Final Words
The W-2 form is an employee’s proof of income for the year their record of the taxes that have been withheld from their paychecks, and any benefits they have received from the employer. Employers must provide W-2 forms to each employee no later than January 31st after the end of the year, and the employee must then have the W-2 form in hand to file their income taxes.
Attend the Compliance Prime webinar to learn more about Form W-2.
