How To Fill Out A W-2 Form


For many businesses, filling out employee W-2s is a time of reflection, a time to look back at the past calendar year and really see how much extra they’re paying for labor thanks to pesky minimum wage laws. But alas, there’s an upside to all of this paperwork–it isn’t hard. Any business that has basic recordkeeping skills can turn the W-2 process into a quick, easy, and only slightly depressing process.

To Thine Own Self Be True

This first step is likely the easiest because an employer only has to know about one thing: their own business. Hopefully, any person running a business will have made this their top priority at one point or another. There are three important facts that must be known: federal employer ID number, business name and business address. A control number is never required, but it’s a great way to keep droves of employees from becoming mixed up.

Pesky, Pesky Wages

While the last step was easy, this step may be more painful for some. This step involves the tallying of employee wages. There are a variety of items that must be included for Uncle Sam to not see your reporting as attempted tax evasion, including:

• Box 1: Total wages, tips and other compensation
• Box 2: Total amount of withholding
• Box 3: Total Social Security wages
• Box 4: Total Social Security tax withheld
• Box 5: Total Medicare wages and tips
• Box 6: Medicare tax withheld
• Box 7: Social Security tips
• Box 8: Allocated tips

All of these are ways in which employees can earn income during their employment with a business. Those who find themselves missing any applicable portion of this data may want to consult a tax attorney, or begin the pleading process with the IRS, whichever seems more likely to work.

When Your Employees Get Old…

Boxes 11 and 13 of the W-2 are home to information regarding employee retirement plans and whether they’re a statutory employee. If an employee participates in a qualified retirement plan, then box 13 must be checked. Those who don’t get the tax benefits of a qualified plan should see box 11 checked. Now let’s add two more checks just for fun. If the person is a statutory employee or received third-party sick pay, then they will have their own set of boxes checked.

Even More Compensation

To the distress of many an employer, there’s even more compensation employees may receive. Box 12 is the dastardly place where these items go, and they can include:

• Nontaxable sick pay
• Excludable reimbursed moving expenses
• Non-statutory employee stock options
• Golden parachute payments

The Power of the Deduction

Every employer wants to help out their employees, and box 14 makes this possible (even if it’s required by the IRS). This box contains other deductions or compensation, such as:

• Nontaxable income
• After-tax pension
• Uniform deductions
• Union dues deductions

In a “State” of Confusion

The state section is just as important as the federal portion of the W-2, regardless of the mean things the federal section says about the state when they’re not around. Items in this area include:

• Box 15: The two letter state code and business state tax ID number
• Box 16: State wages
• Box 17: State income tax withheld
• Box 18: Local wages
• Box 19: Local income tax withheld
• Box 20: Locality name

Are We Having Fun Yet?

Filling out a W-2 form isn’t nearly as daunting as many business owners would have some people believe. Proper recordkeeping makes this process simple and not only keeps Uncle Sam happy, but keeps employees from storming the front door when they owe the IRS.

Image License All rights reserved by Angela Hartwig


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