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As a small business owner, it is your responsibility to complete and submit a Form W-2 for each employee.
As a small business employer, you are responsible for distributing IRS Form W-2 in the new year so your employees can begin to file their federal and state taxes. Unfortunately, Form W-2 can be quite confusing. Luckily, we have a guide below that should answer the common Form W-2 questions that may occur to you as you prepare your forms.
What is IRS Form W-2?
Form W-2 shows an employee’s gross wages from the year, and the taxes withheld. You must send the W-2 Wage and Tax Statement to each employee, as well as to the Social Security Administration. You must also submit a Form W-3, which is a summary of all W-2s, to the SSA.
Who Receives Form W-2?
You must create a W-2 for each paid employee from the year, even if they no longer work for you. Do not give a Form W-2 to independent contractors. Instead, you must send contractors Form 1099.
What is Included on Form W-2?
The form typically includes this information:
- Employee’s Social Security number
- Employee’s personal information
- Your business’s information and your Employer Identification Number
- Wages, tips, and other compensation
- Taxes withheld
Where Can You Get W-2 Forms?
You can typically purchase W-2 forms from the IRS or a local office supply store. You can view a sample of the form on the IRS website, but you cannot use the example.
Where Do You Send the Forms?
In addition to sending each Form W-2 to your employees and the SSA, the form has many copies that need to be distributed to specific places. The copies are as listed:
- Copy A: Mail or e-file to the SSA with Form W-3
- Copy B: Send to employees for their federal tax returns
- Copy C: Send to employees for their records
- Copy D: Keep this copy for your business records.
- Copy 1: If you are required to do so, file this with the state, city, or local tax department.
- Copy 2: This is sent to the employee to file this copy, if required, with their state, city, or local tax department.
When is Form W-2 Due?
You must send W-2s to employees by January 31st. You must also submit your W-2 and W-3 to the SSA by the same date. If January 31st falls on a holiday or a weekend, Form W-2 is due on the following business day.
Avoid These Common Errors
When filling out your forms, make sure you haven’t committed any of these common mistakes:
- Using an outdated form
- Sending Form W-2 to IRS instead of SSA
- Filing the form late
- Submitting a handwritten W-2
- Formatting mistakes
- Using the IRS sample
- Cutting, stapling, or folding Form W-2
- Using dollar signs
- Not using decimals for dollar amounts
If you have made a mistake, you can use Form W-2c to make corrections.
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