What is a W-2 form?

Form W-2 is also called the Wage and Tax Statement. It’s the statement that each employee receives in January so they can file their taxes. You’re required to complete and file a W-2 for every employee who earns $600 or more during the year.

Employers have to create six copies of the W-2 for each employee. You keep one copy, the employee receives three copies and the government receives the other two copies. You also need to complete a W-3 form, which is a summary of the W-2 information for all your employees.

The form features lots of boxes for various information. Lettered boxes offer a spot for identifying information for the employee and employer. Numerical boxes are for numbers that represent necessary information. The first numbered box is for wages, tips and other compensation. The form also includes boxes for various types of taxes, such as federal withholding, that you withheld and other data required to file taxes. You won’t have data for every box for most of your employees.

When do W-2s come out?

When do W-2s go out? Business owners have to file and send W-2 forms by January 31 each year. If that date falls on a weekend or a holiday, the deadline moves to the next business day.

You have to file the W-2 forms and a Form W-3 with the Social Security Administration. You can send in paper forms or submit the forms online for free. If you have 250 or more forms to submit, you need to file them electronically.

Form 8809 allows you to file for an extension for submitting your W-2 forms. You have to mail the form, and you must meet the criteria for requesting the extension. This typically includes catastrophic events such as a fire or natural disaster. The IRS must approve the request.

Another common question is when are W-2s available to employees? You have to send a copy to each employee by the same date, January 31. Your employees don’t have to receive them by January 31, but you have to send them by that date. The IRS encourages people to contact them if they don’t receive their W-2s by February 15.

What happens if you miss the deadline?

Missing the W-2 filing deadline can cost your company a lot of money. The IRS charges penalties for late W-2 forms. The penalties are charged for each form that’s late with a maximum total penalty amount. That means the more employees you have, the higher your penalties can be.

Here’s an overview of the penalties for businesses with gross receipts of $5 million or less:

• Up to 30 days late: $50 per form with a maximum of $194,500
• 31 days late through August 1: $110 per form with a maximum of $556,500
• After August 1: $270 per form with a maximum of $1,113,000
• Intentional disregard: $550 per form with no maximum

The per-form penalties are the same for businesses that have gross receipts of more than $5 million. However, the maximum penalty amount is higher for these companies. The maximums are $556,500 for up to 30 days late, $1,669,500 through August 1, $3,339,000 after August 1 and no maximum for intentional disregard.

When to start completing W-2 forms for employees

Don’t wait until the last minute to complete the W-2s for your employees. It can take time to gather the data that’s required. If you rush and make a mistake, you’ll have to correct the form. You may also face penalties if you include incorrect information or leave out required information.

It’s also better for your employees because they don’t have to wonder, “When do W-2s come out?” Many people like to file their taxes as soon as possible, especially if they’re expecting a refund. Sending the forms early lets them do that.

You won’t have all of the financial data until the end of the year. However, you can verify addresses and other information for your employees. It’s also a good idea to make sure employees’ W-4 forms are still accurate, as they need to file new ones if their circumstances change. Fill out as much information as you can ahead of time. Once the year wraps up and you have the payroll data for your employees, complete the rest of each form.

Tips for completing W-2 forms

Considering the steep fines you can receive if you don’t submit the forms accurately and on time, it’s important to do them correctly. Here are some tips to help you complete W-2s for your employees:

• Keep employees informed: Let your employees know when they can expect to receive their W-2s. It can ease some anxiety if they’re waiting and don’t know when it’ll arrive. It can also keep you from hearing, “When do W-2s come out?” from all of your employees.
• File and send them early: Don’t take chances with last-minute filing. Complete the W-2s early, and send them as soon as you know they’re done correctly. This eliminates any risk of sending the forms late.
• Consider a third-party payroll provider: If you use a third-party payroll provider, you can have them complete the W-2s for you. This saves you time and reduces the risk of mistakes. It also ensures the forms get done on time.
• Know who needs a W-2: You only need to complete a W-2 for an employee who earns at least $600. If you have independent contractors, you’ll need to complete a Form 1099-NEC instead of a W-2, which also has a filing deadline of January 31. Ensure you classify employees correctly and fill out the appropriate form to avoid penalties from the IRS.
• Verify the form accuracy: An inaccurate form can cost you in IRS penalties, and it costs you more time when you issue a corrected form. Check and recheck the forms before submitting them. You might print a copy of the forms and have your employees review them for accuracy before submitting them. This can help you catch mistakes early and prevent delays.
• Use the correct form: When completing your W-2 forms, you’re doing them for the previous year. The forms due by January 31, 2022, are for the 2021 tax year. Make sure you use the correct version of Form W-2 if you complete the paper version.