With the New Year right around the corner, you’re already developing a new business strategy that will help you thrive in January. However, don’t forget that your tax forms are due this month, one of which is form W-2.
Filing W-2 forms is key to complying with the Internal Revenue Service (IRS) and Social Security Administration (SSA). This article will explain three ways to send your W-2 forms.
Let’s dive right into the three ways you can send your W-2 forms to employees.
The most convenient way to distribute W-2 forms to your team members if they work from your office is to do so in person. There are several ways to submit the paperwork. In most cases, you want to use your accounting software to generate the documents and print them using your office printers. Alternatively, ask your accounting firm to do the work for you.
Keep in mind that you don’t need a special type of paper or formatting, making this way of submitting forms different from IRS filings. That said, you should put your W-2 forms in envelopes to keep prying eyes from observing sensitive information. Preferably, go for privacy envelopes for extra security.
Furthermore, don’t forget to notify your employees when the forms are ready. The onus is on you as the owner to ensure each worker receives their W-2 by the deadline, which is January 31 of next year for most states.
If some of your workers are remote, physical delivery isn’t an option. However, you can mail physical copies to your staff.
You can take two courses of action here: hand over the W-2s yourself using your accounting software or outsource the job to your accounting agency or any other payroll provider.
The latter might be more convenient because it means less work on your part. The company performs every step of the submission, from generating the forms to sending them to your employees. The provider will usually offer to dispatch the paperwork straight to your team members’ doors, leaving you out of the process altogether.
While this saves you a lot of time, it may not be smart from a privacy perspective. The firm might use regular envelopes, exposing your employees’ Medicare information, social security numbers (SSNs), earnings, benefits, and other sensitive data. As a result, you may want to transmit the documents yourself because you’ll definitely use privacy envelopes.
Another great idea is to ensure your paperwork is couriered with insurance. The United States Postal Service (USPS) offers insurance of up to $5,000 to compensate you in case of paperwork loss.
Also, if you issue your W-2 forms by mail, you’ll need to dispatch them with a W-3 form, which summarizes the total withholding amounts and wages.
Whenever a W-2 form is mailed, you may still have qualms about the service. Yes, you provide the courier with a privacy envelope, but who knows, they might peek inside anyway. Even worse, they could misplace the documents, which is a common occurrence if they’re new.
To avoid the risks and make sure your paperwork is submitted before the deadline, use electronic delivery. It’s perfect if you have a remote workforce, but you’ll need written consent from your employees to send them W-2 forms.
There are two ways to send digital versions of your W-2s. Most business owners do so through their employee self-service portals. These platforms have intuitive interfaces where employees can access their paychecks, state and federal withholdings, and, most importantly, download W-2 and any other tax form, such as W-9s and W-4s.
Self-service portals generally notify your team members when you upload W-2s, but you may need to inform them yourself. And there’s no need to ask their permission separately – many programs enable users to sign consents when receiving their forms.
If a self-service portal isn’t available, you can transmit your forms by email. This is pretty straightforward, but it can be time-consuming if you have a large enterprise.
Plus, keep in mind that electronic form delivery is prone to security concerns. That’s why you should share your forms with passwords to prevent others from accessing the information. Rather than generate passcodes from scratch, consider using the employee’s zip code and the last few digits of their SSNs.
Besides confirming your W-2 form is provided to employees, you also need to ensure the paperwork is forwarded to the IRS. The organization that sends your W-2s to the IRS is the SSA, which is why you need to provide them with the copies.
The fastest and most secure way to do so is to submit the forms electronically.
E-filing your W-2s to the SSA is one of the smartest decisions you can make as a business owner. Here’s why:
E-filing is advantageous but also obligatory in some cases. Since 2021, if you file at least 250 W-2s for the previous calendar year, the IRS mandates you to do so electronically unless you qualify for a waiver. The IRS may fine you if you don’t comply with this requirement.
Now that you know why filing W-2 forms electronically is so beneficial, you now need to learn how to submit the information to the SSA:
The SSA lets you generate up to 50 W-2s. You can access them anytime and print physical copies for your employees.
And don’t panic if you make a mistake when filing the forms. The SSA allows you to correct errors after the submission, including SSN mismatches and wrong names. Most importantly, the portal confirms if the SSA has accepted your filing.
The IRS has special requirements for employees’ electronic consent. If they provide their consent electronically, according to the IRS, you must receive the consent in a way that proves the employee can access the statement in the same format in which it’ll be delivered.
There are different ways of providing electronic consent forms, depending on your platform, but most programs work the same:
If your staff has difficulty finding the consent form, your HR should help them solve the problem.
Electronic filing is trackable, automated, and expedited. But what if you’re not tech-savvy and don’t know how to use the SSA portal? Paper-based submissions are your only option. In other words, you’ll need to mail your W-2s.
You can find the correct W-2 mailing address on this SSA website. Once you go through the information, you’ll learn that you can send W-2s through your post office to the following address:
Direct Operations Center
Wilkes-Barre, PA 18769-0001
For last-minute submissions, the SSA requires you to forward your forms to Federal Express or UPS. These services will deliver the paperwork overnight at a different address:
Direct Operations Center
ATTN: W-2 Process
1150 E. Mountain Drive
Wilkes-Barre, PA 18702-7997
Alternatively, if you use regular mail, here’s the correct submission address:
Direct Operations Center
P.O. Box 3333
Wilkes-Barre, PA 18767-3333
Whether a W-2 is dispatched through express service or is distributed in a sealed envelope via regular mail, it’s essential to prepare your forms before submitting them. The first step is to understand where to file each copy:
Now let’s take a look at the information you have to provide in each section.
No W-2 is complete without employer information. This is where you insert data about your company, including the name of your entity, address, and employer identification number (EIN).
Many payroll departments use control numbers to distinguish one W-2 from another. It normally has a 10-digit format with a blank between the first five and second five figures (e.g., 12345 19876). You can assign control numbers yourself or let your payroll provider/platform generate them.
The most important part of your W-2 is employee earnings. Use this section to specify how much each employee made in the previous year as well as their tax withholdings. Typically, you’ll need to fill out eight boxes here:
From there, provide information about your team members, including their total wages, tax withholdings, and any other payments they may have received from January to December. These additional payments include dependent care benefits and earned income tax credit (EIC) allocations.
Next up is the retirement plan information for your workforce. For each employee, you’ll need to check the boxes that apply to their retirement plan:
Once you enter the basic retirement details, move on to Box 12, which contains other types of compensation related to your staff’s retirement solutions. W-2 forms generally allow you to choose up to four kinds of compensation.
Here are some of your options:
Box 14 contains other types of compensation or deductions you have to disclose to your team members for tax returns:
The final section on your W-2 forms is local and state information. Here, you enter data about local and state wages as well as relevant withholdings. W-2s typically include boxes for two localities and two states, which is necessary for employees who have worked in multiple places during the year. If you need three or more localities or states, use an additional W-2.
This section consists of six boxes:
When a W-2 is uploaded to a portal, you don’t need to worry about whether or not it’s been intercepted by a third party. The SSA utilizes a secure platform that is encrypted for protection, which eliminates the risk of data theft.
But things are a little different if you take the manual route. Before a W-2 is handed over in person, you need to take proper security measures to prevent information loss.
Take the following tips to shield sensitive information when handing in W-2 forms:
As hand deliveries are particularly risky, you need to take additional steps to safeguard your data:
Electronic W-2 transmissions are secure by default, but there are a few ways to further enhance security:
If your employee hasn’t received their W-2 form, you should check if you’ve submitted the form correctly. Go to your SSA business portal profile and see if you can access the copy. If not, you’ll need to resubmit. If you’ve mailed the document, contact the postal service to check if they’ve delivered it.
Reach out to the IRS as a last resort at 1-800-829-1040. To determine the status of your W-2, they’ll ask for your business name, address, as well as information about the employee who hasn’t received their form, including their wages and withholdings.
Yes. Employers can charge a fee for duplicate W-2 requests, especially if they need them for non-social security purposes. A fee makes sense since it takes a lot of time to generate and forward another form.
If an employee is laid off before December 31 of the year to which the W-2 applies, the employer may send a copy at any time after the termination but no later than January 31 of the following year. If the employee requests their form, the employer must issue it within a month of the request or within a month after the final wage, whichever is later.
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This article will help you understand how to prepare yourself for tax season, prepare and file your taxes according to IRS standards!
