Form W-2 2024: Due date, Applicability, and Filing Process
Apr 5, 2024
Form W-2, "Wage and Tax Statement," is an essential IRS document that employers must submit annually to report employee wages, tips, and taxes withheld. Companies submit a copy to the IRS and provide a copy to the employee in question for their personal tax return.
Critical for both employer compliance and employee tax filing, the W-2 form captures an employee's annual earnings and tax deductions.
Employers are required to send out Form W-2 to their employees by January 31st following the end of the tax year and also file copies with the Social Security Administration (SSA). The W-2 applies to most full-time employees, unlike the 1099-NEC which applies to contract workers.
Accurate completion and timely distribution of Form W-2 are vital to avoid penalties and ensure employees can file their personal income tax returns accurately and on time.
What is the Form W-2?
Form W-2 is used by employers to report total annual wages and the taxes withheld from those wages for full-time employees. This includes federal income tax, Social Security, and Medicare taxes. It also may report state and local taxes where applicable.
The form provides a detailed summary of an employee's compensation and tax withholding for the year, which is necessary for preparing their personal tax returns.
Who needs to file the Form W-2?
All employers engaged in a trade or business who pay remuneration for services performed by an employee, including non-cash payments, must file Form W-2 for each employee from whom:
Income, Social Security, or Medicare tax was withheld.
Income tax would have been withheld if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding on Form W-4.
Why is the Form W-2 Important for my business?
Compliance: Ensures adherence to federal and state tax reporting requirements.
Employee Tax Filing: Enables employees to accurately file their personal income tax returns.
Record Keeping: Serves as an important payroll record for both the employer and employee.
When do I need to submit the Form W-2 for my employees?
Employers must furnish Form W-2 to employees by January 31st of the year following the reportable tax year. Similarly, copies of each W-2 must be filed with the SSA by the same date.
How do I fill out a Form W-2?
Collect Employee Data: Ensure you have accurate payroll records for each employee, including their Social Security number and address.
Determine Wages and Withholding: Calculate the total wages, tips, and other compensation paid to the employee, along with total federal, state, and other taxes withheld.
Complete Each Box on Form W-2: Fill in the required information for each applicable box on the form, according to IRS instructions.
Distribute and File: Provide copies of Form W-2 to your employees by January 31st and file with the SSA, either electronically or by mail.
Common mistakes in Form W-2
Incorrect or Missing Social Security Numbers: Ensure SSNs are accurately reported for all employees.
Late Distribution or Filing: Missing the January 31st deadline can lead to penalties.
Inaccurate Wage or Tax Information: Double-check all figures to prevent errors that could impact employee tax filings or result in IRS corrections.
Form W-2 is a cornerstone of annual tax reporting for employers, providing necessary wage and tax information for employees to file their tax returns.
Maintaining accurate payroll records and understanding the requirements for completing and distributing Form W-2 will help ensure smooth tax season operations for your business and your employees.
