Producing W-2 forms for each employee on payroll is time consuming. But minute attention to detail and accurate record keeping will assist in making this process as painless as possible. In addition, today’s accounting software helps facilitate the task. It is advantageous to double check every W-2 sent out by your company. Minor errors can lead to costly penalties. If some information is incorrect, the form is illegible, or some information is not included, the W-2 will require correction. If corrections aren’t filed and the reasons for not filing don’t meet any of the permissible exceptions, you will be required to pay $50 per return.
Employees must receive their W-2s by January 31. This means they must be mailed on or before January 31. If the date falls on a week-end, you are given until the following Monday to give the forms to the employees. If an employee leaves the company, the W-2 form can be supplied before January 31.
The W-2 Form generally contains six copies. Four copies are given to the employee. The employee then disburses them accordingly- one for the employee’s own file, one to file with federal income taxes, one for state income taxes and one for local income taxes. In addition, one copy is kept by the employer and one is sent to the federal government. Some states do require an eight-copy W-2 however. The purpose for this is so an additional copy can be filed with the state tax department and one with any applicable local tax authority.
After all the hard work of compiling and verifying the W-2s is complete, the numbers from the W-2s need to be total and transmitted onto the W-3, also known as “Transmittal of Wage & Tax Statements.” In essence, it serves as a summary of the employer’s total payroll for the year.