WHEN TAX DAY COMES, YOU NEED TO HAVE ALL THE REQUIRED INFORMATION PREPARED. HERE IS AN EXPLANATION ABOUT W2 FORM 2021 FORM, THE COMPONENTS, AND THE FILING METHODS.
As the tax season of 2021 is approaching, you may have a stack of tax forms waiting to be managed. If you work as an employee for an entity, then certainly one of the documents is W2 Form. Whether you have your tax organized by professional help or you are doing self-preparation, it’s necessary to understand the basics of this particular form.
This article will unfurl what is there to know about W2 Form 2021, as well as what adjustments are made by IRS this year.
What is W2 Form?
W2 Form is formally titled as Wage and Tax Statement. It is a document that must be sent to the employees by the employer to be filled out and then reported to Internal Revenue Service (IRS). It contains information about the yearly wages and taxes withheld of employees from their paychecks.
In simpler words, the form reveals the amount of money that you earned throughout the year and the amount of taxes that your employer has submitted to the IRS.
Who Is Required to File W2 Form?
It is legally required for an employer to hand out a W2 form to each employee who receives a wage, salary, or other types of compensation from them. You will be sent a W2 Form every year, provided that you have made at least $600 throughout the tax year. It even applies to an employee who makes lower than $600 if they have their Medicare or Social Security taxes withheld.
That being said, not everyone is obligated to fill W2 form. For example, a self-employed person that’s hired by a company or business, such as an independent contractor or freelancer, doesn’t use this form.
The W2 form must be issued and sent to the employee no later than January 31st, so there is plenty of time left for the employees to file their income taxes before the Tax Day on April 15th.
What Are The Parts of the W2 Form?
W2 Form 2021 is comprised of the components as listed below:
- Social Security Number (SSN) of the employee
- Employer Identification Number (EIN) of the employer
- The full name and address of the employer and employee
- The amount of received income of the employee by the employer
- The amount of taxes withheld from the paycheck of the employee
- Any adjustments of employee’s income (for example 401(k) contribution)
The information that’s inputted in Form of W2 will be used by IRS to determine the amount of taxes that you owe according to your income. The document also shows the amount of taxes withheld by employees. Other useful information that can be found within the form is the amount of retirement plan contribution annually, the amount of health insurance, or the number of healthcare benefits received by the employee. All of this information is going to be used in order to assess the employee’s individual taxes for a year.
What Information Is Required to Complete W2 Forms?
In order to complete the process of filling out the form of W2, there is basic information that must be gathered in advance. Here is a list that describes the required information:
1. Information About The Business
- Employer Identification Number (EIN)
- Name of the business
- Address of the business
- State Tax ID Number of the business
- Employer’s information
2. Personal Information About The Employee
- Tax Identification Number (TIN) such as Social Security Number (SSN)
- Name of the employee
- Address of the employee
- Annual earning information of the employee
3. Wages And Taxes Withheld Information Of The Employee
- The total of all forms of earnings and compensations
- The total of Social Security wages
- The total of Medicare wages
- Allocated tips and Social Security tips
4. Retirement Plans Information Of The Employee
The information details about the retirement plan contribution of the permanent employees must be indicated in one of the sections within the W2 Form. It also applies if the employee received sick pay from a third party.
5. Special Benefits Information
Information about deductions, including work benefit plan deductions, must be reported in one of the sections within the W2 Form about the income tax return of the employee.
How Do I File W-2 Forms?
There are several parts of the W2 Form. Below is a list that explains to you where each file of the document must be filed:
- Copy A is sent to Social Security Administration (SSA).
- Copy B is sent to file the federal tax return of the employee.
- Copy C is provided for the records of the employee.
- Copy D is provided for the records of the employee.
- Copy 1 is provided for the documentation of locality, city, or state government.
- Copy 2 is provided for the documentation of locality, city, or state government.
There are two methods to file W2 Form 2021, as described below:
Filing By Mail
The copies of the W2 form for the Social Security Administration (SSA) can be sent via mail. To file the document through mailing services, you need to include Form of W4 as well. Here is the SSA address to send the W2 and W3 forms:
Social Security administration
Direct Operations Center
7 Wilkes-Barre Blvd
Wilkes-Barre, Pennsylvania 18769-0001.
Filing Via Online
In recent years, it is encouraged for employers by SSA to file W2 Form online. It can be done through the official Business Services Online site of SSA where you need to be a registered user first. This method doesn’t require you to include the Form of W3.
Previously, an employer must file the forms online if there are more than 250 documents. However, this rule has changed recently. As per 2021, the employer must file the documents online if there are more than 100 documents, and after 2021, the employer must file them online if there are more than 10 documents.
W2 Form 2020 VS 2021
There is no massive adjustment made in W2 Form 2021 compared to the version issued in 2020, but there are indeed some changes. Here is a summarized of what upgrades are made by IRS for this particular document:
As mentioned before, a Form of W2 must be issued and sent by the employer before or on January 31st, so the employees have quite a lot of time to file their income taxes prior to the fixed deadline. However, in 2021, the deadline is changed to February 1st – because January 31st, 2021 falls on Sunday.
The due date to file an individual’s federal income tax is also extended. It usually occurs on April 15th each year, but in 2021, it is set on May 17th. However, the deadline for state tax may not be extended.
This is also mentioned in the prior section. The employer is required to perform E-filing for more than 250 W2 Forms on the previous years. However, for the 2021 tax year, the employer must opt for online filing if there are more than 100 W2 Forms. For the following years, the employer should do the online filing if there are more than 10 forms.
Minor Changes on Wordings
There are some changes on the wordings, such as the title of Copy B, C, D, 1, and 2, or the wordings from ‘also may’ which is adjusted to ‘may also’.
W2 Form 2021 Printable Download
Frequently Asked Questions (FAQ) & Answers
How Do I Obtain My W-2 Form?
The most practical way to get a W2 Form copy is through the employer. As your employer may have sent it before the due date, the document will be submitted to be processed by SSA before it is being transmitted to the IRS.
Who Gives You A W2 Form?
Typically, the employer will provide the form for their employer by the end of January in order to prepare the employees’ tax returns.
Can You File Taxes Without A W2?
Yes, it is possible to file taxes even without the Form of W2 (or W4 and 1099 Forms). You need to use the Substitute for Form W-2, Wage, and Tax Statement document or more commonly referred to as Form 4852.
Do Employers Keep Old W2?
According to federal law, employers are supposed to keep W2 Form copies of their employees for a minimum of four years, but it may be kept for longer than that.
Why My Employer Gave Me A 1099 Instead Of A W2?
If you received the 1099 Form instead of being sent the W2 Form, then you are being hired by the company as an independent contractor instead of a permanent employee, in which you provide your service as a ‘self-employed’ person.
Will I Get A W2 If I Only Worked 1 Day?
Yes. A W2 Form is still required regardless of your working period for a certain job, so the employer can file the income taxes properly. Internal Revenue Service obliges to include all income on the tax returns, even if you only work for one or two days.
After you have completed filling out the W2 Form 2021, make sure you do double-check to prevent error. Some of the commonly found errors on this document are using the wrong year version, leaving some details on the information, or entering the information in the wrong section. Providing inaccurate information on the document may cause you to have to re-send the form.