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It’s W-2 Season! The Deadline is January 31

It’s W-2 SeasonAnyone who works at a job for a living is likely familiar with the W-2 that arrives in the mail and that must accompany their tax returns. We thought it would be useful to provide a quick review of this essential IRS form – its purpose and employer responsibilities for distributing it.

The purpose of the W-2

The W-2 tax form is also known as a Wage and Tax Statement. It shows the amount of taxes withheld from a worker’s paycheck for the year and is used for filing federal and state taxes.

In addition to reporting the amount of federal, state and other taxes withheld from a paycheck, it also reports the employee’s wage and salary information.

It’s important to note that, when an employer sends a W-2 to an employee, the IRS also receives a copy. Therefore, the IRS already knows whether someone owes taxes or not and can take action if a tax return isn’t filed.

What is required of employers?

To ensure that taxpayers have their forms in time to file their taxes, the IRS requires employers to send their employees W-2s no later than January 31 following the close of the tax year, which is usually December 31.

Employers are required to complete and file a Form W-2 for each employee for whom any of the following applies (even if the employee is related to the employer) if they:

  • Withheld any income, social security, or Medicare tax from wages regardless of the amount of wages; or
  • Would have had to withhold income tax if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding on Form W-4; or
  • Paid $600 or more in wages even if any income, Social Security, or Medicare tax wasn’t withheld.

Take note: Independent contractors must receive 1099-MISC forms, not W-2s.

As part of Marathon HR’s comprehensive payroll plans, we take care of the preparation and distribution of all W-2s at year-end on behalf of our clients. This allows them to focus on growing their businesses rather than the administrative responsibility of sending out tax forms. Let us know how we can help you better prepare for the next tax season!

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