How to File W-2 Form: Step-by-Step Guide for Employers

If you’re an employer, you’d probably know what a W-2 form is, right? It’s the annual wage statement which summarizes the compensation paid to employees and taxes withheld. Well, we get that filing W-2s might not be the most exciting part of your business, but if you file it incorrectly or delay filings, the IRS may come after you. Stay with us for the next few minutes and we’ll make sure you understand all about filing this form.

Importance of Filing Form W-2

Form W-2 is the document that helps the IRS connect the dots between the employers’ payroll records and the employees’ tax returns. This process makes sure there are no discrepancies in wages and taxes.

If you’re an employer, you must file W-2 for every employee who received wages, subject to Social Security, Medicare, or income tax withholding.

Now, don’t confuse W-2 with 1099-NEC. W-2 is for employee wages and 1099-NEC is for independent contractor payments. It’s easy to mix these up.

Even if you file the correct form we’re talking about (W-2), make sure you file it on time and accurately. The consequences if you goof-up are expensive.

Penalties for late W-2 filing are:

• $60 per form (≤ 30 days late)
• $130 per form (by August 1)
• $340 per form (after August 1)
• $680 per form for intentional disregard

Who Must File W-2 Forms?

Do you need to file a W-2? Let’s find out!
You must if:

• You withheld any amount of income, Social Security, or Medicare tax from an employee’s paycheck (doesn’t matter what the amount is)
• You paid an employee $600 or more in wages even if you didn’t withhold any taxes

This applies to corporations, LLCs, non-profits, government agencies, or even if you’re a household employer paying a nanny or a caregiver.

What to Collect Before Filing W-2

Tax professionals are mostly in a hurry to file W-2s during tax season. So, it’s important to do the prep work way before it arrives. It’s like stocking up on all the ingredients before you start cooking a meal. Incorrect or incomplete information causes IRS mismatches, penalties and B-notices. So, here are the W-2 filing requirements for employers.

Employer Details

• Your official business name and complete address
• Employer Identification Number (EIN). This is the 9-digit number the IRS assigns to your business.
• State and local ID numbers. These are used for state and local tax reporting.
• Form W-3 only if you’re filing on paper. It’s the summary cover sheet of all your W-2s.

Employee Details

• Each employee’s full legal name matching Social Security Administration records.
• Social Security Number (SSN). It’s the 9-digit number assigned to each person.
• Current residential address for mailing their copies
• State and local tax jurisdiction info, if it’s applicable

Payroll and Compensation Data

• Total taxable wages, salaries, and tips
• Federal income tax you withheld
• Social Security wages and tax withheld (it’s subject to annual wage base)
• Medicare wages and tax withheld (no wage base cap on this one)
• Additional Medicare Tax withheld (if the employee made over $200,000).
• Taxable fringe benefits like company car use, group-term life insurance, or other perks.
• Retirement plan contributions (401(k), SIMPLE IRA, etc.)
• Dependent care benefits, health insurance coverage, or adoption assistance (if applicable)

Here’s a tip: Before you touch those W-2s, reconcile your payroll records with your quarterly Form 941 filings to catch any mistakes.

How to File W-2 Form

When it’s time to file your W-2s, follow this simple process and you should be good. Like we said, we’re in this together!

• First, gather your ammunition. Collect all payroll and tax withholding documents.
• The second step is to complete Form W-2 by filling in Boxes 1 to 20. Each one covers wages, taxes, benefits, and state information.
• Next, distribute copies to your employees. Give Copy B, C, and 2 to the recipients by January 31. Here’s a tip: Circle this date on your calendar.
• It’s time to file with the SSA. Send Copy A electronically or on paper (along with Form W-3 transmittal).
• This is important. If you’re filing 10 or more information returns in total across all types combined e-filing is not optional. It’s mandatory.
• Finally, keep all your records and copies of it safe for at least four years. Just in case the IRS coming knocking.

Key W-2 Deadlines

If you think the IRS is flexible with the due dates, you’re wrong. Here are form W-2 deadlines for 2025 you shouldn’t miss.

• Employee copies: January 31, 2025
• SSA filing deadline (paper): January 31, 2025
• SSA filing deadline (electronic): January 31, 2025

Note: Use Form 8809 to request a 30-day extension to file your W-2s (only for extraordinary circumstances or catastrophes) and do it before the due date. Also, you can’t get an additional extension.

Avoid These Common Mistakes

• Misclassifying employees as independent contractors.
• Missing deadlines is expensive and pretty common.
• Using the wrong SSN or EIN. Remember, it triggers IRS mismatches.
• Filing the same W-2 twice can cause confusion and more work.
• Payroll math can go wrong. Incorrect wage or tax amounts is usually a payroll error.
• There are also payers who forget checking state-specific W-2 reporting rules.

Real-World Examples

How about some practical examples of W-2 vs 1099 employee reporting you can actually use to clear you any confusion? Keep reading!

1. An employer pays a part-time employee $5,500 in wages.

Correct form: W-2

Why: Because wages exceeds $600 and is subject to withholding.

2. An employer pays a nanny $20,000.

Correct form: W-2

Why: Household employees must get W-2s, not 1099s.

3. A business hires a freelance graphic designer for a project and pays $800.

Correct form: 1099-NEC

Why: This person is an independent contractor, not an employee.

4. An employer misses the January 31 deadline.

What happens: It’s time to pay penalty! $60 per form if 30 days late or less, $130 by August 1, $330 after August 1, or $660 for intentional disregard.

5. An employer issues a W-2 with an SSN that’s incorrect.

Correct form: W-2c (Corrected W-2)

Why: Corrected form must be filed with the SSA, and the employee must get an updated copy soon.

FAQs

1. Who is the recipient of a W-2 form?

Every single employee which means those who are full-time and part-time, as long as their wages were subject to withholding.

2. Do I need to send W-2s to independent contractors?

No, they receive a 1099-NEC instead. That is if you paid them $600 or more during the year.

3. Can I file W-2s electronically?

Yes. Actually, if you’re filing 10 or more total information returns for the year, e-filing is a must.

4. What should I do if I find an error after filing?

All you have to do file Form W-2c with the SSA and give your employee updated copy.

5. What happens if I file a late W-2?

You’ll have to pay penalties ranging from $60 to $660 per return depending on how late you are.

6. What if I file both W-2 and 1099 for the same worker? Is there a penalty?

Oh yes. This misclassification leads to IRS audits and penalties. Our advice? Pick one form wisely.

Filing your W-2 forms is a cakewalk with Tax1099! Avoid penalties and stay in the IRS’s good books with our secure platform.

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