Every government makes its revenues from taxes. Individuals and companies remit their taxes to the government directly. There is also another category of taxes which are included in the prices of goods we buy. It is normal for an employee and the employer to sign an agreement when one is employed. One such agreement between an employer and employee is the agreement that the employer should remit taxes on behalf of the employee to the government. You can read more about w2 form click
The W-2 form is a compulsory thing to sign whenever an employer pays taxes on behalf of the employee. This is the form given by an employer to both the employee whose tax is remitted and the government. Details of the employees earning are given here. The company has to prepare a form for each of its employees. The employer, therefore, has to know all the information to include in the W-2 form.
The W-2 Form is divided into three major categories. The categories are all to be filled correctly by any employer as any mistakes may lead to penalties or payment of wrong amounts of taxes. The form requires one to provide information such as the employee and employer terms, earning and tax details and finally any crucial information. The employers task is reduced because there are standard forms available hence no need to make new ones. The forms are available for download and you can also get them from your tax agent. Find out more information about w2 form website
Details of the employee and the employer as well as their relationship is included in the first section of the W-2 form. All the necessary information of the employee must be provided here. There are boxes allocated for all the information required for the employee. Some of the information to be supplied includes social security number of employee, the address of both the employer and employee, full names of the employee, employee work number as well as his payroll number. Correct filling of this section is crucial as it eliminates issues such as double taxation and duplication of forms.
The other step is filling of the financial details by the employer. This is the most important section of the W-2 form. Details of this section are the earnings made by the employee during the entire year. The employee's full payment details as paid every month should be included here. The employer includes details of the employee about wages such as how much tax they have remitted on behalf of the employee as well as the total earnings of the employee. The allowances the employee gets from the company are however not part of this information if they are not included in the employee's salary. The employer is then given a portion in the form to provide any extra information that may be necessary for the tax filing. Pick out the most interesting info about w2 form https://en.wikipedia.org/wiki/Form_W-2