News For This Month: Resources

W2 Forms: How to Create and File Income Returns

For every person that is employed and receives noncash payments from their employer, all amounts equal or exceeding six hundred dollars requires the person the funds were paid to, to fill out a W-2 form. This form is the one that shows the amount paid by an employer, the taxes withheld as well as the employee’s social security number. When an employee is preparing his or her tax return, on the W-2 form, the amount withheld is usually deducted from the tax that’s due. In case the amount withheld from an employee’s income is more than necessary, it is possible for the employee to get a refund from the Internal Revenue Service.

During the filing process, it is wise that every employee knows that the amount on the W-2 form is sent to the Internal Revenue Service by the employer and if the amounts tend to differ with what the employee has filed, the Internal Revenue Service may become suspicious. Every employee has three forms. The first form is sent to the Internal Revenue Service, the second one is sent to the employee while the third one is kept by the employer for record keeping.

The deadline set by the Internal Revenue Service for employers to send to their employees the W-2 forms is the thirty first of January. All submissions should be done on or before February 29 as that is the deadline set by the Internal Revenue Service. There are six copies of the W-2 form. The breakdown of the form is as listed below.

The first copy also known as Copy A is submitted to the Social Security Administration by the employer. The second copy is also known as Copy B is sent to the employee so that they can file federal income tax returns. Copy C is the third one and this copy is usually sent to an employee so that they can keep their own records. The other copy, Copy D is retained by the employer for record keeping purposes. There’s a fifth copy is known as Copy 1 which the employee files for purposes of state or local income tax returns if any. Copy 2 is the last one and this is sent to an employer so that they can also file for state or local income tax returns, if at all there is any.

To conclude, it is recommended that seriousness should prevail from both employers and employees when it comes to filing income tax returns. This is due to the fact that if either fails to play their role, they can be met with serious consequences coming from the Internal Revenue Service. Therefore, for all employees that are entitled to wages and also salaries, there is need to fill out the W-2 form when it is time to avoid being penalized by the Internal Revenue Service.

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