Preparing Forms W-2 can be difficult, but we are here to help simplify things! We have compiled this list to help ensure that you don’t make these common errors for Form W-2.
A Brief History
To reduce errors for Form W-2, it is important to know what this form is and how it is used.
Form W-2, Wage and Tax Statement, was introduced in 1943 and first sent to employees in 1944. Over time the form has grown to be the complex information reporting form we have today. Form W-2 includes boxes for wage and salary information to be reported on the federal and state levels. The information on this form is essential for employees to report on their personal tax return.
By following this guide, we go over the most common errors for Form W-2 so you can avoid potential fines and penalties.
Most Common Errors For Form W-2
Once you have completed the following:
- 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;
Then, 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.
When completing your forms, ensure that you don’t make these common errors for Form W-2:
Using the Wrong Form Type
It is important to ensure that you are always use the correct form type for each institution. Do not download Copy A of Form W-2 from the IRS website and file it with the SSA.
As with all tax reporting forms, you should make sure you are completing the Forms W-2 for the correct tax year, which is the year the payments were made; NOT the year in which you are preparing the forms.
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 their Form W-4 or requesting a new one.
Leaving Out or Entering an Incorrect TIN
If you fail to provide the correct Taxpayer Identification Number (TIN) for the employer or employees, you could be subject to fines or penalties.
The best fix for TIN validation issues is to catch them before you submit your filings to the IRS. 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.
Making Errors in Box 12
Box 12 is a bit more complex than most other boxes on Form W-2.
First, this box is split into 4 sections labeled 12a, 12b, 12c, and 12d. These labels have lowercase and that is for a distinct reason: upper case letter are reserved for the Box 12 codes. Be sure to always use upper case letters when filling codes here.
Next, these 4 sections are split horizontally as well. The left side is for reporting codes, while the right side is for reporting amounts.
With over 20 codes that can appear in Box 12 and each employee not limited to only one code. We recommended following our Form W-2 Box 12 Code Guidance PDF for a breakdown of each individual code.
Download our Form W-2 Box 12 Codes Guidance PDF to understand how to complete it correctly. This box has over 20 codes that can be used, and you are not limited to using only one code per employee. Due to this, we recommend utilizing our Form W-2 Box 12 Code Guidance PDF for a breakdown of each code.
Making General Errors for Form W-2
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 misformatting data. These errors for Form W-2 are more common than you’d think. Using tax software, such as BoomTax, could help avoid or minimize such simple errors for Form W-2.
After you’ve double-checked your filings for these common errors for Form W-2, you should be good to submit your filing to the IRS and any applicable states.
Once you’ve submitted these forms to the IRS either electronically using an authorized transmitter, using the SSA BSO portal, or via mail and have received their “Accepted” status, then your filing obligation has been satisfied.
If you’d like a full breakdown of Form W-2, take a look at our article, Mastering Form W-2: The Essential Guide or learn more here:
BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.