Know the Details of a W-2 Form
Every government’s revenues are majorly raised from taxes. Direct remittance of taxes to the government is done by an individual or companies. Government also taxes us through taxes included in the prices of the goods we buy. When an employee gets employed by a firm, they are required to sign agreements with the employer. 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.
The W-2 form is a compulsory thing to sign whenever an employer pays taxes on behalf of the employee. 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 company has to prepare a form for each of its employees. The employer, therefore, has to know all the information to include in the W-2 form.
There are three divisions of the w-2 forms. 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. To get the forms, you may 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. Here, detailed information of the employee must be given. There are boxes allocated for all the information required for the employee. Social security number of employee, address of both the employer and employee, full names of the employee, employee work number as well as his payroll number are some of the information that should be filled in the first section of the W-2 form. This information should be filled correctly to avoid double taxation or duplication of forms.
The employer then fills the financial information. This is the most important section of the W-2 form. How much money the employee made in the entire year is included in this section of the form. 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 form W-2, however, does not include allowances the employee gets that 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.