What is a W-2 Form?
A W-2, known officially as a “Wage and Tax Statement,” is a tax form employees use to file federal and state taxes. The form shows the amount of taxes withheld from the employee’s paycheck for the year, and paid directly to the IRS and state government by their employer.
Who needs a W-2 Form?
If your business has employees, those employees need a W-2 form from you to file their taxes. However, independent contractors, freelancers, and other self-employed workers should receive Form 1099 instead of a W-2.
When should I send a W-2 Form to my employees?
Businesses are mandated by law to provide employees with a W-2 no later than January 31 after the end of the tax year.
Why should I send a W-2 Form to my employees?
If you fail to send a W-2 to your employees, you’ll be liable to pay fines to the government — up to $1,072,500 depending on how late you file, and how many employees you have. You’ll also be doing a disservice to your employees, and probably cause them to become disgruntled.
Without the W-2, your employees wouldn’t know how much money they’ve already paid to the IRS and your state government, and it would be impossible to calculate their final tax bill. Your employees may accidentally end up facing penalties for underpaying their taxes, or fail to receive a tax refund if they’ve overpaid.
How do I submit W-2 Forms to employees and the government?
You can provide your employees with a form created for free with our W-2 builder and fulfill your legal requirements to them. However, when submitting the W-2 to the Social Security Administration (SSA), you should either file them electronically, or order scannable paper forms directly from the IRS and mail them. Businesses that send non-scannable W-2 forms to the SSA are liable for penalties.
W-2 Form Sample
Here’s what a W-2 form looks like: