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An Employer’s Guide to the W-2 Form
Every government’s revenues are majorly raised from taxes. Taxes are remitted by individuals and companies directly to the government. Government also taxes us through taxes included in the prices of the goods we buy. It is normal for an employee and the employer to sign an agreement when one is employed. One such agreement between an employer and employee is the agreement that the employer should remit taxes on behalf of the employee to the government.
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. Each of the employees of the company has to get a form prepared for them. 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. Mistakes such as wrong tax amounts and risk of penalties are the reasons why the information in this form should be filed correctly. The categories are the description of employee and employer terms and relationship, earning and tax information and finally any other relevant additional information. Standard forms are available and an employer does not, therefore, need to go through the hustle of creating new forms. To get the forms, you may download them or get them from your tax agent.
The first section of the W-2 form involves information about the employee and employer. All the necessary information of the employee must be provided here. There are boxes allocated for all the information required for the employee. 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. This information should be filled correctly to avoid double taxation or duplication of forms.
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. The employer includes details of the employee about wages such as how much tax they have remitted on behalf of the employee as well as the total earnings of the employee. The form W-2, however, does not include allowances the employee gets that are not included in the employee’s salary. There is then an extra space for filling in any extra information that may be relevant to the tax issue.
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