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How to Report Wages and Salaries with the IRS W-2 Form

IRS W-2 Form: Wage and Tax Statement

The tax period is near and this means that soon we’ll have to deal with various IRS forms. Usually, the taxpayers have to submit their tax forms to the Internal Revenue Service by the 28th of February. In this blog post we’ll discuss one of the most widely used IRS W-2  form for the tax year 2017. This form has been revised by the IRS and has some crucial changes: new due date for filing the form with the Social Security Administration, increased penalties for misfilling, and new time extensions. The employers and employees should learn about these new peculiarities. That is the only way to complete the form properly and get rid of problems. Let’s get started.

Who needs a W-2 Form?

Form W-2 is an obligatory form to be completed by every employer. The W-2 doesn’t have to be filled out by the employee; instead, it is given to inform the employee about the amount of his annual income and taxes withheld from it.

What is the W 2 Form for?

Form W-2 contains the exact amount of money paid to the employee and the amount of taxes paid on his earnings for the year. While the W-2 Form is filled out by an employer only, it is sent out to other people to inform them about the income and tax withheld. There are three parties that receive the form:

  • Government
  • State
  • Employee

Even though an employee does not fill out the form, he might need it when filling out the 1040.

Is the W-2 accompanied by other forms?

If form W-2 is filled out by the employer, it is followed by the W-3 form. But when an employee gets a W-2 form for guidance, he attaches a tax return to the W-2 copy.

When is the W-2 form due?

The W-2 form (copies B, C and 2) is submitted to the employee by January 31, 2017. Otherwise, the employer risks breaking the law and being penalized for that. The Social Security Administration also should receive copy A of the form by the 31st of January, even in case of e-filing.

How do I fill out form W-2?

In general, the W-2 form is divided into two parts each with numerous fields to be completed carefully by an employer. The section on the left contains both the employer’s and employee’s names and contact information as well social security number and identification number.

The part on the right concerns actual wages and taxes paid on it. The fields are as follows:

  • Annual wages and compensation
  • Income tax withheld by the federal authorities
  • Taxable social security wages
  • Social Security taxes paid on the wages
  • Annual Medicare wages
  • Medicare tax withheld from the annual pay
  • Social security tips
  • Allocated tips
  • Field 9 should not be filled out since it will be removed from the form W-2
  • Dependant care benefits paid by the employers on employee`s behalf
  • Nonqualified plans deferred compensation
  • Different types of compensation and benefits (with a letter code)
  • Your employer’s state ID number
  • Total amount of state wages
  • The amount of tax withheld from state wages
  • Field Local wages
  • The amount of local tax withheld locally
  • Locality name is the legal name of the city or state

Where do I send the W-2 form?

As mentioned above, the W-2 form is submitted by the employer to the Internal Revenue Service, Social Security Administration, employee and state government.