If you have employees, you know that you will eventually have to prepare a W-2 form for them. This is the form that shows the information of your employee including their name, wages, taxes deducted, etc. They use this form to file their tax return.
As a result, it’s imperative that you provide your employees with an accurate W-2 form. You need to avoid making the common W-2 form mistakes.
But what are these common mistakes that you need to make sure you avoid?
This short guide will help you out.
Avoid These Common W-2 Mistakes
Before you continue, we suggest that you look for an amazing W2 maker to easily create the W-2 forms for your employees.
You also want to make sure that when you hire new staff that you have them write down their credentials to include on their W-2. Store these safely and create a digital copy. You want to confirm with your staff that none of the information has changed prior to sending them a W-2.
Here’s what else to avoid:
1. No Titles/Abbreviations
Under no circumstances should you use a title or abbreviation in the name field. For example, if your employee is the Director of Marketing, it should be written as such. “Dir of MrKtng” is unacceptable.
You shouldn’t use a nickname for your employee. If your employee is named Johnathan, then you shouldn’t write ‘John’ in their name field. Their full legal name is required.
2. EIN & SSN
Your company will have an Employer Identification Number, known as an EIN. This must be written correctly on your document. Even if one number is incorrect this can cause issues.
The same goes for your employee’s social security numbers. If there is an error, this means that they will have to request a new W-2 from you. This will slow them down in filing their returns.
3. Form Standards
All W-2 forms must be printed out. None of the fields can be filled out with handwriting. You should type out the information in the form and then print it out. The font size also has to be large enough for the average person to read.
You want to make sure that you insert decimals correctly. For example, $1,000 should be written as 1000.00. There should be no dollar sign.
You want to make sure that you send the W-2 forms on time. Make sure you always keep an eye on the IRS deadlines as they can change.
If you don’t submit the W-2 form on time, it not only causes issues for your employee but can also cause a penalty for your company.
Finally, you want to make sure that there are no miscalculations on the documents. This is where a W-2 maker comes in handy. It lets you enter the numbers and does the calculations for you.
Machine and computer calculations will always be more precise and reliable than human calculations so make sure you have a calculator or application handy when calculating the correct amounts to add to the form.
Send The Forms
Now that you know the common W-2 form mistakes to avoid, you are ready to prepare and send the forms. Make sure to share this information with other business owners.
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