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When you ship Types W-2 to your workers, you don’t have to fret concerning the annual type till subsequent yr. Or, do you? In the event you don’t know how you can fill out Type W-2, you might run into issues.
Your workers would possibly come to you with questions on Type W-2. And, your workers might imagine you made a mistake if their W-2 Field 1 worth is decrease than what they imagine they earned.
Prepared to chop by the confusion? Learn on to discover ways to fill out Type W-2, field by field, and what all of it means.
Instance Type W-2
Earlier than we dive into how you can fill out Type W-2, right here’s a easy pattern of a Type W-2 for an worker who earns $50,000 yearly.
Easy methods to fill out Type W-2
You might need your Type W-2 duties right down to a science. Enter worker info; ship copies to workers; file the shape with the SSA and state, metropolis, or native tax division; and repeat the next yr.
Or, you simply would possibly spend hours gathering worker info and attempting to decode the Wage and Tax Assertion.
Whether or not you full Types W-2 by yourself, use payroll software program, or have a tax preparer, you have to be semi-fluent in realizing how you can fill out Type W-2.
As a generalization, Type W-2 containers present identification, taxable wages, taxes withheld, and advantages info.
Bins A-F are easy. They record figuring out details about your corporation and worker. The numbered containers, Bins 1-20, can get a bit extra difficult.
In order for you Type W-2 defined, dive into every field’s function under.
W-2 Field A: Worker’s Social Safety quantity
Field A reveals your worker’s Social Safety quantity. Social Safety numbers are 9 digits which might be formatted like XXX-XX-XXXX.
In case your worker utilized for a Social Safety card and has not obtained it, don’t go away the field clean. As a substitute, write “Utilized For” in Field A on the Social Safety Administration copy. When the worker receives their SS card, you need to problem a corrected W-2.
W-2 Field B: Employer Identification Quantity (EIN)
Field B reveals your Employer Identification Quantity. EINs are nine-digit numbers structured like XX-XXXXXXX.
The quantity you enter in Field B is similar on each worker’s Type W-2. The IRS and SSA establish your corporation by your distinctive EIN.
Don’t use your private Social Safety quantity on Types W-2. In the event you wouldn’t have an Employer Identification Quantity, apply for an EIN earlier than submitting Type W-2. Then, mark “Utilized For” in Field B.
W-2 Field C: Employer’s title, handle, and ZIP code
Field C additional identifies your corporation by itemizing your organization’s title and handle. Use your corporation’s authorized handle, even when it’s totally different than the place your workers work.
Your workers might wonder if the handle is wrong if it’s totally different than their work handle. Confirm your authorized enterprise handle and guarantee your worker it’s correct.
W-2 Field D: Management quantity
Field D is likely to be clean, relying on whether or not your corporation makes use of management numbers or not.
A management quantity identifies Types W-2 so you possibly can preserve information of them internally. In the event you don’t use management numbers, go away this field clean.
W-2 Bins E and F: Worker’s title, handle, and ZIP code
Field E reveals the worker’s first title, center preliminary, and final title. Reference the worker’s SSN to enter their title appropriately.
Enter the worker’s handle in Field F.
W-2 Field 1: Wages, ideas, different compensation
Field 1 studies an worker’s wages, ideas, and different compensation. That is the quantity you paid the worker in the course of the yr that’s topic to federal revenue tax.
Funds not topic to federal revenue tax embody pre-tax retirement plan contributions, medical health insurance premiums, and commuter advantages.
The wages you report in Field 1 is likely to be greater or decrease than different wages on Type W-2. This isn’t essentially a mistake.
For instance, an worker’s Field 1 wages will be decrease than Field 3 wages. Some pre-tax advantages are exempt from federal revenue tax however not Social Safety tax.
W-2 Field 2: Federal revenue tax withheld
Field 2 reveals how a lot federal revenue tax you withheld from an worker’s wages and remitted to the IRS.
Federal revenue tax withholding is predicated on the worker’s taxable wages and submitting standing.
In case your worker has a query about their refund quantity or why they owe taxes, instruct them to Field 2. The IRS compares what the worker paid all year long in federal revenue taxes to their whole legal responsibility.
W-2 Field 3: Social Safety wages
Field 3 reveals an worker’s whole wages topic to Social Safety tax. Don’t embody the quantity of pre-tax deductions which might be exempt from Social Safety tax in Field 3.
The quantity in Field 3 shouldn’t be greater than the Social Safety wage base, which is $168,600 for 2024.
In the event you should report Social Safety ideas (Field 7), the entire of Bins 3 and seven should be lower than the Social Safety wage base.
W-2 Field 4: Social Safety tax withheld
Field 4 studies how a lot you withheld from an worker’s Social Safety wages and ideas.
The worker portion of Social Safety tax is 6.2% of their wages, as much as the SS wage base. Field 4 can’t be greater than $10,453.20 ($168,600 X 6.2%) for 2024.
W-2 Field 5: Medicare wages and ideas
Enter how a lot the worker earned in Medicare wages and ideas in Field 5.
An worker’s Field 5 worth is mostly the identical as Field 4’s quantity. Nevertheless, there is no such thing as a Medicare wage base. If the worker earned above the Social Safety wage base, the quantity in Field 5 is greater than Field 3.
For instance, the worker earned $180,000. The worker’s Social Safety wages, (Field 3) ought to present $160,200 whereas Field 5, Medicare wages and ideas, shows $180,000.
W-2 Field 6: Medicare tax withheld
Field 6 shows how a lot you withheld from an worker’s wages for Medicare tax. The worker share of Medicare tax is 1.45% of their wages.
The quantity in Field 5 multiplied by the Medicare tax price ought to equal Field 6. But when the worker earned above $200,000 (single), their tax legal responsibility needs to be better.
In the event you paid an worker above $200,000 (single), you must have additionally withheld the extra Medicare tax price of 0.9% from their wages above $200,000.
W-2 Field 7: Social Safety ideas
In case your worker earned ideas and reported them, enter the quantity in Field 7. Additionally, embody these tip quantities in Bins 1 and 5.
Once more, the entire of Bins 7 and three shouldn’t be greater than $168,600 for 2024.
W-2 Field 8: Allotted ideas
Report the ideas you allotted to your worker in Field 8, if relevant. Allotted ideas are quantities that you just designate to tipped workers. Not all employers must allocate tricks to their workers.
Don’t embody the quantity in Field 8 in Bins 1, 3, 5, or 7. Allotted ideas usually are not included in taxable revenue on Type W-2. Workers should use Type 4137 to calculate taxes on allotted ideas.
W-2 Field 9: (Clean)
Go away Field 9 clean.
W-2 Field 10: Dependent care advantages
Did you give an worker dependent care advantages underneath a dependent care help program? In that case, embody the entire quantity in Field 10.
Dependent care advantages underneath $5,000 are nontaxable. Advantages over $5,000 are taxable. In the event you gave an worker greater than $5,000, report the surplus in Bins 1, 3, and 5.
W-2 Field 11: Nonqualified plans
Field 11 studies employer distributions from a nonqualified deferred compensation plan to an worker.
Embody the distribution quantities in Field 1, too.
W-2 Field 12: Codes
There are a number of W-2 Field 12 codes you might must placed on an worker’s Type W-2. If relevant, add the codes and quantities in Field 12.
These codes and values might decrease the worker’s taxable wages.
Let’s say an worker elected to contribute $1,000 to a 401(okay) retirement plan. You’d write D | 1,000.00 in Field 12.
W-2 Field 13: Checkboxes
Field 13 shouldn’t embody values. As a substitute, mark the containers that apply. There are three containers inside Field 13:
- Statutory worker
- Retirement plan
- Third-party sick pay
For instance, in case you entered Field 12 code D to indicate the worker’s retirement contributions, additionally verify the ‘Retirement plan’ field.
W-2 Field 14: Different
Report quantities and descriptions in Field 14 equivalent to automobile lease funds, state incapacity insurance coverage taxes withheld, and medical health insurance premiums deducted.
W-2 Field 15: State | Employer’s state ID quantity
Like Field B, Field 15 identifies your corporation’s employer ID quantity. However, Field 15 is state-specific. Mark your state utilizing the two-letter abbreviation. Then, embody your state EIN.
Some states don’t require reporting. Go away Field 15 clean if in case you have no reporting requirement along with your state.
Contact your state in case you wouldn’t have an employer’s state ID quantity and want one.
W-2 Field 16: State wages, ideas, and so forth.
Field 16 reveals an worker’s wages which might be topic to state revenue tax. If the worker works in a state with no state revenue tax, go away Field 16 clean.
An worker’s Field 16 quantity might differ from Field 1. This isn’t essentially a mistake. Some wages are exempt from federal revenue tax and never state revenue tax.
W-2 Field 17: State revenue tax
Report how a lot you withheld for state revenue tax in Field 17. In the event you didn’t withhold state revenue tax, go away Field 17 clean.
W-2 Field 18: Native wages, ideas, and so forth.
In case your worker’s wages are topic to native revenue tax, embody their whole taxable wages in Field 18. Go away this field clean if the worker works in a locality with no revenue tax.
The quantity you record in Field 18 would possibly differ from Bins 1 and 16.
W-2 Field 19: Native revenue tax
Report any native revenue tax withheld from the worker’s wages in Field 19. Go away this field clean whether it is inapplicable.
W-2 Field 20: Locality title
Field 20 ought to present the title of town or locality.
Loosen up—Patriot’s payroll software program has you coated.
- Digital or printable W-2s
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This text has been up to date from its authentic publication date of February 20, 2019.
This isn’t supposed as authorized recommendation; for extra info, please click on right here.
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