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Every business owner needs to know how to properly file a W-2 to avoid mislabeling employees or incurring fines from the IRS due to incorrect filing.
Every year, businesses need to file IRS W-2 forms for each of their employees. This is critical because it is how employers claim wages, withheld wages, and benefits for their employees. W-2 forms are due for the previous calendar year by January 30th of the following year. For example, the W-2 forms for 2022 will be due by January 30th, 2023. Being late will have serious consequences, so make sure these are done on time!
Who Do You File For?
It’s important to know exactly who you need to file for. Employees are distinct from independent contractors, and employees are the only workers you need to file a W-2 for. Independent contractors that work with your business should be given IRS Form 1099-MISC. You will only give one of these to independent contractors that made at least $600 while working for you during the previous calendar year.
Employees, on the other hand, will need a W-2 on file. This is how you report wages and benefits for all of your employees, and it is also necessary for your employees to have access to this so that they can report their wages independently for their own personal taxes.
Make sure you clearly understand the difference between an employee and an independent contractor so that you can file your taxes correctly. Filing incorrectly can lead to extensive paperwork in order to correct the misclassification, back taxes, and fines. A mistake like this can seriously haarm your business, so don’t hesitate to speak to a professional if you’re ever unsure about something.
W-4 Forms
When you hire an employee to work at your place of business, you must always have them fill out a W-4 form. This form is important because it contains all of the necessary information you need in order to file their W-2. This is where they put information such as their full name, address, social security number (SSN), and claim any withholding allowances. All of this information is absolutely necessary for filing your W-2 forms correctly, and ensuring that your taxes are filed correctly also protects your employees from being caught in an audit due to mistakes made by their employer.
How to File
Once you’re ready to file your W-2 forms, you have two options: hard copy or electronic. While hard copy is still available, it is not recommended if you can access the online eFile system. Electronic filing is significantly easier, and it can be streamlined with the appropriate software, such as QuickBooks. Much of this information can be filled automatically, so having a system that is kept up-to-date and accurate will save you a lot of time every January.
Trust the Professionals at the Harding Group
Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for consultations and strive for open communication with our clients.
Are you interested in business advising, tax preparation, bookkeeping and accounting, payroll services, training + support for QuickBooks, or retirement planning? We have the necessary expertise and years of proven results to help.
We gladly serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of tax time, contact us online or give us a call at (410) 573-9991 for a free consultation. Follow us on Facebook, Twitter, YouTube, and LinkedIn for more tax tips.