The gig economy is going strong, and many professionals have gone freelance. You may have decided to start a side hustle. Maybe it’s a podcast or a blog about your favorite hockey team.
Whatever the case, you may be wondering about the upcoming US tax season. If you need to pay American taxes, you likely have questions about all the forms and rules.
One of the most basic things you’ll need to do is file a W2. Creating a W2 can be easy. Follow these tips to make sure you get it right.
Information to Include When Creating a W2
The very first thing you should do is find out what information you need to generate W2 forms. If you have employees, you’ll need to generate forms for them as well.
You need to include your employer’s information, such as your business name and address. You should also have an employer identification number from the IRS.
For each W2 you need to prepare, you’ll include your employees’ total wages, tips, and other salary information. You’ll also include the amounts of tax withholding and any Social Security deductions.
Confirm Employee Information is Correct
You also need to include identifier information about each employee. This includes their name and their address. If any information has changed, it must be updated for the W2.
It’s important to make sure you have the correct Social Security Number for each employee. The IRS uses that number to make sure withholdings and deductions are credited to the right taxpayer account.
Depending on the state you’re paying wages in, you may need to include state tax identification numbers as well.
Make Sure You Have the Right Form
There are a few different versions of Form W2 out there, so it’s always a good idea to double-check you’re using the right one. You should always use the form for the tax year you’re filing. This may not be the same as the year you’re preparing the form in.
Using the services offered by a pay stub generator is an easy way around this problem. Most offer W2 generators and other services. They’ll always be using the right form, so you don’t need to worry.
You’ll need to ensure you have all the copies. Copy A goes to Social Security, while Copy B goes to the IRS. Copy 1 is for the city, state, or locality you’re filing in.
Keep in mind that Copy A can’t be scanned, so you can’t print the forms from a website. If you want to use printed copies, you’ll need to order them from the IRS or a payroll service.
You can make electronic copies with a pay stub creator, which can save you time and money.
Mark it on Your Calendar
W2 forms must be mailed by January 31. Electronic copies should be received by employees on or before that date.
Creating a W2 doesn’t need to be difficult. The right tools will help make tax season easier, so you can get back to what you love.