Preparing Form W-2: A Step-by-Step Guide for Tax Year 2018

It is important that you know what information you need before you begin preparing Form W-2. We’ve identified the following 5 key topics that may help you to correctly and timely complete your W-2 filing with our Step-by-Step Guide.

1. Determine Who Must Receive a Form W-2

The IRS instructs that a W-2 form much be completed and filed for each employee who, in the past year, you have made payments to for their services in your trade or business.

2. Gather Information to Prepare Form W-2

Before preparing your Forms W-2, you will need to gather the tax information for the business(es) and employees you are filing for, including their name, address, tax identification numbers (TINs), and amounts paid to the employees.

3. Check for Accuracy

In order to avoid potential penalties, it is important to take the time to review and verify the information to be reported on your W-2 forms for accuracy before filing and distributing.

Tools such as TINCorrect can help you verify tax identification numbers for payers and employees in advance.

4. File and Distribute W-2 Form

Form W-2 is a multi-part form that requires copies to be distributed to several parties, including the IRS, employee and, if applicable, a state tax department.

5. Deadlines for Form W-2

W-2s must be filed with the Social Security Administration and furnished to employees by January 31, 2019, by electronic or mail filing.

1099-MISC Automatic Extensions Discontinued by IRS

The IRS has recently handed down a decision to eliminate automatic extensions for Form 1099-MISC for all businesses. This new decision also states that individual requests with sufficient cause made directly to the IRS may have some difficulty with earning approval.

This regulation is the result of an increase in fraudulent tax returns and identity theft in recent years. The IRS is aiming to catch fraudulent filings by eliminating automatic extensions and tightening the deadlines for filing submissions. This will allow them to compare all payment claims made with individual TIN numbers.

This means all reporting must be submitted by January 31, 2019. Each late submission is subject to a fine between $100 and $260 per form.

In order to avoid potential penalties, BoomTax suggests that you proactively keep track of your submission data by using our Form 1099-MISC Excel spreadsheet so that it’s ready to drag and drop into your BoomTax account when Tax Year 2018 filing becomes available.

Other ways to help you be prepared for tax reporting include:

  • Requesting TIN information from recipients via Form W-9 as soon as possible.
  • Verifying that TIN information ahead of time using TINCorrect.

B and P Notice Prevention

To recap, B and P notices are sent by the IRS regarding incorrect name and TIN combinations from previous tax years’ information returns. They are also known as CP2100/CP2100A and 972CG, respectively. Failing to address and respond to these notices can result in penalty fines by the IRS. So how can you eliminate or at least diminish your chances of receiving these notices?  Continue reading B and P Notice Prevention