Know the Details of a W-2 Form
Every government’s revenues are majorly raised from taxes. Taxes are remitted by individuals and companies directly to the government. There is also another category of taxes which are included in the prices of goods we buy. It is normal for an employee and the employer to sign an agreement when one is employed. The agreement for the employer to remit taxes on behalf of the employee is one of the agreements between an employer and the employee.
When a company pays taxes on behalf of its employees, the W-2 form has to be given. The employee whose tax has been remitted as well as the government both get the W-2 form from the employer. Here, the information of the employee’s earnings are given. The form is prepared for each of the employees of the company. The employer, therefore, has to know all the information to include in the W-2 form.
The W-2 Form is divided into three major categories. Incorrectly filled forms may lead to penalties or the employer paying incorrect taxes to the government. These three categories of information include the description of employee and employer terms of employment, earning and tax information and a section to fill any extra information. The employers task is reduced because there are standard forms available hence no need to make new ones. All you need to do is to download them or get them from your tax agent.
Details of the employee and the employer as well as their relationship is included in the first section of the W-2 form. All the necessary information of the employee must be provided here. All information to be given is to be filled in the boxes provided in the form. 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. Details of this section are the earnings made by the employee during the entire year. Details of the employee’s payment per month are provided in full. 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. The allowances the employee gets from the company are however not part of this information if they are not included in the employee’s salary. The employer is then given a portion in the form to provide any extra information that may be necessary for the tax filing.