In our last post, we discussed how to easily and correctly issue and file 1099s for non-employees. Today, we’ll discuss another critical aspect of your small business’ tax time preparations — issuing and filing W-2s for employees. Whether you hired employees for the first time this year or if you’re a seasoned entrepreneur, it is important to familiarize yourself with the process as well as with important changes to W-2 filing requirements for 2015.
To Whom Do I Issue A W-2? • Any employee (full- or part-time) you paid and withheld taxes from in 2014
What Do I Need To Report? • Wages • Tips • Income tax withholdings • Social Security and Medicare withholdings • Any other forms of compensation (ex: the cost of healthcare benefits if you have 250+ employees)
What Do I Need To Do? 1) Complete a W-2 form for each of your employees. You can complete the form on paper or online via the Social Security Administration (SSA) website. 2) Provide each employee with a copy of his or her W-2. Your employees will need copies of their W-2’s in order to complete their own federal and state tax returns. 3) Keep a copy for your records. You will want to keep Copy D of each W-2 for your personal records. 4) Send your W-2s to the SSA. Submit Copy A of each completed W-2 to the SSA. You can file them online or via snail mail. You must accompany your W-2s with Form W-3, which is a summary of all your W-2s for the year.
How Can I Avoid Errors? • Verify employee names and Social Security numbers against the SSA’s database. • Check your W-2 forms for correctness with AccuWage, the SSA’s free software program.
What Are The Deadlines? • February 2– You must issue W-2s to all employees by this date. • March 2- You must submit all W-2s to the SSA by this date.
If you have any questions regarding your company’s W-2s, contact the SSA directly through its Regional Employer Services Liaison Officers or its Employer Reporting Service Center. Our SBDC office is also available to provide advice on your small business tax preparations. Feel free to contact us at (712) 325-3376 to schedule an appointment.
The Iowa Western Small Business Development Center is a free resource for small businesses and start-ups in Southwest Iowa. We serve seven counties – including Cass, Fremont, Harrison, Mills, Page, Pottawattamie, and Shelby – and provide free counseling services to help businesses start, grow, and prosper.
(Photo credit: Chris Potter / Flickr)