Gathering Information to Prepare Form W-2

Before you prepare your Forms W-2, you will need the tax information for the employer and employees, as well as the amounts paid and withheld for the employees.

A. Employer Information

You will need to include the following information on each Form W-2 you prepare.

  • Federal Employer Identification Number (EIN)
  • Employer Name
  • Employer Address

B. Employee Information

  • Employee Social Security Number or Taxpayer Identification Number (SSN/TIN)
  • Employee Name
  • Employee Address

C. Reporting Amounts

Box 1: Wages, tips, other compensation. The total taxable wages, tips, and other compensation paid to the employee during the reporting year.

Box 2: Federal income tax withheld. The total federal income tax withheld from the employee’s wages for the year.

Box 3: Social security wages. The total wages paid before payroll deductions that are subject to employee social security tax but do not include social security or allocated tips.

Box 4: Social security tax withheld. The total employee social security tax withheld, including social security tax on tips. The amount should not exceed $7,960.80

Box 5: Medicare wages and tips. The total Medicare wages and tips. Wages and tips subject to social security tax (boxes 3 and 7) are also subject to Medicare tax.

Box 6: Medicare tax withheld. The total employee Medicare tax withheld, including any Additional Medicare Tax, for the reporting year.

Box 7: Social security tips. Enter the tips that the employee reported even if you do not have enough employee funds to collect the social security tax for the tips. Boxes 3 and 7 should not total more than $128,400.

Box 8: Allocated tips. If the employer is a large food or beverage establishment, enter the tips allocated to the employee. This amount is not included in Boxes 1, 3, 5, or 7.

Box 9: Verification code. If you are participating in the W-2 Verification Code pilot, enter the appropriate code on Copies B and C.

Box 10: Dependent care benefits. The total dependent care benefits under a dependent care assistance program paid or incurred by you for the employee.

Box 11: Nonqualified plans. This box is used by the SSA to determine if any part of the amounts reported in Box 1 or Boxes 3 and/or 5 were earned in a prior year.

Box 12: Codes. These IRS codes are designated for certain items being reported, including uncollected social security or Medicare tax on tips, taxable costs of group-term life insurance over $50,000, or elective deferrals.

Box 13: Checkboxes. These boxes are to indicate situations that apply to the employee, including whether they are a statutory employee or if they were an active participant in a retirement plan.

Box 14: Other. If you included 100% of a vehicle’s annual lease value in the employee income, it must also be reported here or on a separate statement. This box may also be used for other information you may want to give to the employee.

Boxes 15-22: State and local income tax information. Enter the state and local income tax information to be reported.

 

Common Errors Form W-2

Once you have:

  • Determined who must receive a Form W-2
  • Collected your company information;
  • Collected your employee information;
  • And finalized and collected the amounts to be reported

You should have everything you need to complete and file your Forms W-2.

However, before you submit your filing, you should take a moment to review your information and forms for accuracy in order to avoid potential penalties or other problems.

Some common errors when completing Form W-2 include:

Using the wrong institution’s form.

Do not download Copy A of Form W-2 from IRS.gov and file with the SSA. In fact, with BoomTax, you don’t have to worry about downloading any forms from the IRS or SSA at all. By filing electronically through BoomTax, you allow us to generate the proper forms for you and submit them to the correct institution.

Omitting decimal points and cents from monetary entries.

Make sure to include the total amount to be reported, as well as the decimal points.

Misformatting the employee name.

Always review the spelling of your employees’ names when entering them into the Form W-2. If you are unsure or otherwise doubt the spelling you entered, it’s always best to double check with the employee(s) in question by reviewing or requesting another Form W-4.

Leaving out or entering an incorrect TIN number.

If you fail to provide the correct Taxpayer Identification Number (TIN) for the employer or employees, you could be subject to fines or penalties.

You should also verify the employer and employee TIN numbers. You can do this by consulting their documentation. You can also utilize tools like TINCorrect to double-check that the information provided to you matches the information on file with the IRS.

Other general form errors.

Completing the W-2 forms on your own by paper could result in simple errors such as using ink that is too light, inserting font that is too large or too small, or mis-formatting data.

With BoomTax, you can avoid or minimize such simple errors with guided help along every step of the way.

File & Distribute Form W-2

Several parties will require copies of your reported Forms W-2. The copies should be distributed as follows:

Copy A → SSA

Copy 1 → State, city, or local tax department

Copy B → Employee

Copy 2 → Employee

Copy C → Employee

Copy D → Employer (for record-keeping)

When you e-file your Forms W-2 with BoomTax, you will also be able to electronically distribute the appropriate copies to the employee and, if applicable, the state tax department. Please note that electronic delivery of employee copies must have prior consent from the employee as the method of delivery. You can also choose to print and mail paper copies of their return.