As an employer, you’re responsible for completing and sending W-2s to your employees and the government by January 31 each year.
W-2s are a necessary part of payroll, so it’s essential that you understand the ins and outs of the form. Here’s a step-by-step guide on exactly how to fill out a W-2, along with details on your requirements as an employer.
What is a W-2?
The Form W-2 Wage and Tax Statement is how companies report each employee’s annual wages, deductions, and tax withholdings to the IRS. It’s like a pay statement for the entire year.
You only need to complete W-2s if you have employees. If you hire independent contractors and pay them more than $600 in a tax year, then you’ll fill out a 1099 form instead.
A W-2 and W-4 are not the same form.
A W-4 is a tax form your employees complete when you first hire them or if their filing status changes.
A W-2 is a tax form you complete and send to your employees and the government every year.
What do I need to do with the W-2 form?
As an employer, you need to complete a W-2 for each of your employees. Okay, but when do employers have to give W-2 forms to employees? You’ll send each employee a copy and submit all your W-2s to the Social Security Administration by January 31. You’ll also send a copy to your city, county, or local tax agency.
Where do I file it?
In total, you’ll prepare six copies of the W-2 for each employee. Here’s what you’ll do with each copy:
Copy A: Send to the Social Security Administration (not the IRS).
Copy 1: Send to your state, city, or local tax department.
Copy B, C, and 2: Send to your employee.
Copy D: Keep for your records.
If keeping track of where to submit six forms makes your head spin, you can opt to use a payroll service like PayNortheast, which issues W-2's to your employees and files the forms (yes, all of them) for you.
How do I prepare and file a W-2 form?
You have three options when it comes to preparing your W-2s:
Complete and print them yourself.
Use an online filing service.
Use a payroll service that prepares and files them for you.
1. Complete, print, and mail them yourself
While the IRS has a sample W-2 form and W-2 instructions, you’ll need to obtain hard copies if you decide to complete the forms yourself. You can’t just download and print PDF copies of the blank forms. Instead, you’ll purchase the forms from an office supply store or order them from the IRS.
Also, you can’t reuse forms from the previous year, like a W-2 from 2019, because the forms have the tax year printed on them. You’ll need to purchase a new set of forms each year.
Next, you’ll decide what software you’ll use to complete and prepare the forms for printing. After the forms are complete, you’ll send each one to the appropriate recipients.
Here are the IRS guidelines for printing W-2 forms:
Use black ink in 12-point Courier font.
Don’t complete by hand or use script or italic fonts.
Don’t use a dollar sign or comma.
Use decimal points for cents.
If a box doesn’t apply, leave it blank.
2. Use a payroll service
Almost all payroll services prepare and file your W-2s for you. Using a payroll service is the most hands-off approach since your payroll processor stores your data and takes care of the forms for you.
That’s everything you need to know about what to do with Form W-2 at the end of the year. Hopefully this guide makes your requirements a lot clearer, so you can have an easier time filing W-2s for your team.
Quick note: This is not to be taken as tax advice. Since tax rules change over time and can vary by location and industry, consult a CPA or tax advisor for specific guidance.