Important Facts to Know about the W2 Form

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Now that the New Year has started, many small business owners are thinking about the upcoming tax season. Even though the tax filing deadline is still a few months away, there are a few things that you need to do in January to comply with federal and state tax laws.

If you pay employees or contractors, then you need to provide the right tax forms to these individuals before the end of this month. Today we are going to look at the form that needs to be provided to employees: Form W-2.

What is Form W-2?Facts to Know about W2 Form

This paperwork is one of the most commonly used tax forms because every employee needs to receive one each year. The information on this form provides reporting to the government about how much an employee was paid and the amount of taxes that were withheld.

It can be confusing to look at a tax form and understand where the numbers need to be recorded. If you aren’t familiar with these forms, then the best thing that you can do is talk to an accountant or payroll specialist who can help you with W-2 completion and distribution.

Who Should Receive a W-2?

Every employee that was paid during the previous year should receive a W-2 from your company. Even if the employee only worked for a short period, you are still required by law to provide the necessary tax forms.

Contractors who were hired to work for your company independently should not receive a W-2, only the people on payroll. Independent contractors need a Form 1099-MISC instead. Your accountant or payroll service can help you determine the classification of individuals so that you can be sure that you are sending out the right forms.

The W-2 needs to be sent to the employee before January 31st. Additionally, you will need to provide copies of the W-2’s as well as Form W-3 to the Social Security Administration.

Do you need help with the completion and distribution of your payroll tax forms? Hire a professional to help! Here at R&R Payroll & Bookkeeping Services, we offer the knowledgeable experience that you need. Contact us for more information: (951) 296-0412.