|
 |
|
Frequently Asked Tax Questions And Answers
Keyword: W-2
1.6 IRS Procedures: Copies & Transcripts
Can I get copies of my prior year Forms W-2 from the IRS?
The quickest way to obtain a copy of a prior year Form W-2 (PDF) is through your employer. If that is not possible, you can order
and pay for copies of your entire return (attachments include Form W-2) from
IRS, or order W-2 information at no charge from IRS. IRS can provide W-2 information
for the current and past 9 years. Complete and mail Form 4506 (PDF), Request for Copy of Tax Return and Form 4506-T (PDF) Request for Transcript of Tax Return. You should allow
60 calendar days for a response.
References:
- Form 4506 (PDF), Request for
Copy of Tax Return
- Form 4506-T (PDF) Request
for Transcript of Tax Return
1.7 IRS Procedures: Extensions
I filed an extension in April because I had not received a Form
W-2. At the time, I estimated my cost and paid it. I still have not received
a W-2, and my extension will expire soon. What should I do?
In general, employers must provide employees with a Form W-2 by January
31. If you have not received your Form W-2 you should:
First, contact your employer to find out if or when the W-2 was mailed.
You may not have received your W-2 because of an incorrect or incomplete address.
This can be checked and corrected when you talk to the employer.
If the W-2 was returned to the employer because of an address problem,
or was not yet issued, allow a reasonable amount of time for the employer
to re-mail or issue the W-2. Then, if you still do not receive your W-2,
contact the IRS for assistance at (800) 829-1040. When you call, you will
need to give us the following information in order for us to prepare Form 4852 (PDF), Substitute for a Missing Form W-2.
Your employer's name and complete address, including zip code, employer
identification number (if known), and telephone number,
Your name, address, including zip code, social security number, and telephone
number; and
An estimate of the wages you earned, the federal income tax withheld,
and the period you worked for that employer.
IRS will mail you a copy of Form 4852, but you should use it only if
necessary to meet the filing deadline. If you file your return and attach
Form 4852 instead of a W-2, your refund may be delayed while the information
you gave us is verified.
If you receive a corrected W-2 after you file your return, and it does
not agree with the income or withheld tax you reported on your return, you
must file an amended return.
References:
- Form 4852 (PDF), Substitute
for a Missing Form W-2
1.10 IRS Procedures: Name Changes & Social Security Number Matching Issues
I got married last year. I have filed with the Social Security Administration
for name and address change, but my Form W-2 still has my maiden name. Can
I send it in as it is with our joint return or do I need to get a new W-2?
You can use the Form W-2 (PDF) you received from
your employer. If the W-2 has your maiden name, all you have to do is cross
it out and write in your married name. The last name on the tax return is
verified through the Social Security Administration. Make sure that the name
matches the name listed with the Social Security Administration. Tell your
employer about the name and address change so that your current Form W-2 reflects
the correct information.
I got married and I have not changed the name on my social security
card to my married name. My Form W-2 is in my married name but my tax forms
came in my maiden name. Should I file with my maiden name or married name?
It is important that the name the Social Security Administration has in
its system for your social security number agrees with the name on your tax
return. You have a choice. You can file with your maiden name and contact
the Social Security Administration after
you file your return. Or, if you have enough time before the due date of your
return, you can contact the Social Security Administration and have your records
changed. Please wait 10 days to file your tax return. You can contact the
Social Security Administration at (800) 772-1213.
References:
1.15 IRS Procedures: W–2 - Additional, Incorrect, Lost, Non-receipt, Omitted
What is the deadline for my employer to get my W-2 forms to me?
An employer is required to furnish a completed Form W-2 (copies B, C, and
2) to each employee showing their compensation and tax withholding amounts
for the calendar year, generally, by January 31 of the next year. The employer
may choose to "furnish" the completed W-2 in a manner other than mailing,
but mailing a properly addressed form on or before the due date meets the
"furnish" requirement.
References:
What do I do if an employer has not provided me a W-2 form?
After January 31st, if you want to file but have not received your Form
W-2, you should contact your employer to find out if or when the Form W-2
was mailed. You may not have received your W-2 because of an incorrect or
incomplete address. If so, you can provide a correct address at this time
or send a self-addressed stamped envelope to the employer.
If the W-2 was returned to the employer because of an address problem or
was not yet issued, after contacting the employer, allow a reasonable amount
of time for the employer to mail the form to you. If you still do not receive
your W-2, contact the IRS for assistance at (800) 829-1040, but not before
February 16th. An IRS representative will complete a W-2 complaint on Form
4598, " Form W-2 or 1099 Not Received or Incorrect." A copy of the Form 4598
will be sent to the employer and a copy to you along with Form 4852 (PDF), Substitute for a Missing Form W-2. When you call or
visit a walk-in office, please have the following information available:
Your employer's name and complete address, including zip code, employer
identification number (if known - see prior year's W-2 if you worked for the
same employer), and telephone number,
Your name, address, including zip code, social security number, and telephone
number; and
An estimate of the wages you earned, the federal income tax withheld,
and the period you worked for that employer. The estimate should be based
on year-to-date information from your final pay stub or leave-and-earnings
statement, if possible.
If you file your return and attach Form 4852 to support the withholding
amount claimed instead of a Form W-2, your refund can be delayed while the
information you gave us is verified.
If you receive a Form W-2 after you file your return and it does not agree
with the income or withheld tax you reported on your return, file an amended
return on Form 1040X (PDF), Amended U.S. Individual
Income Tax Return.
References:
I didn't get my W-2 by January 31, so I asked my employer for it,
but I still don't have it. What should I do?
If you don't receive your Form W-2 by February 15, contact the IRS for
assistance at (800) 829-1040. Also, you may want to refer to Tax Topic 154, Form
W-2 - What To Do if Not Received, to see the specific information the
IRS will need in order to prepare Form 4852 (PDF), Substitute
For a Missing Form W-2.
References:
How do I get my W-2 form from a company that went under last year?
If you need to file a return for the most recent tax year and you have
not yet received a Form W-2, try either calling at the last known telephone
number or send a self-addressed stamped envelope to the last known address.
Even though the company has gone out of business, they might still be having
their mail forwarded. Because the company "went under," it may be in bankruptcy.
If the employer has not furnished Forms W-2 to the employees and all the company
assets, including payroll records, are currently part of a bankruptcy estate,
the bankruptcy trustee should issue the Forms W-2 in connection with wage
claims paid by the trustee. Contact the bankruptcy court for the name of the
trustee assigned to the bankruptcy case.
If you are unable to obtain a copy of your W-2, contact the IRS after February
15th of the following year and a representative will take a W-2 complaint.
Form 4598, "Form W-2 or 1099 Not Received or Incorrect," will be completed.
A copy will be mailed to the last known address of the employer and one to
you, along with a Form 4852 (PDF), Substitute
for a Missing Form W-2.
If it has been nine months or more since the end of the tax year, the IRS
may be able to provide you with a transcript of the W-2 filed by the employer
with the Social Security Administration. Call (800) 829-1040 or (800) 829-3676
to ask for Form 4506. If you filed a return with the original W-2 attached,
but now need a copy, you may order one from the IRS with a Form 4506 (PDF), Request for Copy of Tax Return.
References:
I've lost a W-2 form. How can I get another one?
You can request a copy from your employer. Employers should keep their
employment tax records, including Forms W-2, for at least four years.
If you are not able to obtain a copy from your employer, there are two
options for assistance from the IRS. You can request a transcript of the W-2,
which is a line-by-line computer printed facsimile of the form filed by the
employer with the Social Security Administration (state withholding information
is not shown on a transcript), or you can request a photocopy from the service
center. In either case, you should use Form 4506 (PDF), Request
for Copy of Tax Return . IRS transcripts of the three most recent tax
years are generally available nine months after the tax year. Call for assistance
at (800) 829-1040 or (800) 829-3676 to ask for Form 4506. The response time
is about 10 days. Photocopy requests can take up to 60 days. Copies of Forms
W-2 and tax returns are generally available for the prior six years. Both
transcripts and photocopies of Forms W-2 are free of charge. There is a fee
of $23 ($39 as of January 1, 2004) for photocopies of tax returns.
References:
Can I file a tax return using a photocopy of my W-2? Does it matter
which copy is copied, e.g. employer, state, etc.?
You can use a photocopy of your Form W-2 as long as it is legible. It does
not matter which copy you use because they all contain the same information
in the same format.
I forgot to mail my Form W-2, schedules or forms with my tax return.
What should I do?
Wait until the Internal Revenue Service requests the Form W-2 (PDF), schedules or forms. The request will be made in writing
within six weeks from the date you mailed the return and the notice acts as
a transmittal that enables the service center to match the W-2 you send with
the tax return. Do not send the Form W-2 separately before you receive the
notice, nor should you submit another return with the Form W-2 attached unless
there is a change in your return that you are amending.
For more tips and information on tax return filing procedures, refer to
Chapter 1 of Publication 17, Your Federal Income Tax.
References:
I received a W-2 with the wrong social security number. Do I need
to do anything?
Ask your employer for a corrected W-2, which is Form W-2C (PDF), Corrected Wage and Tax Statement . Make sure that your
employer has your correct social security number. If the W-2 information is
not correct, you will not be credited with the quarters you worked during
the year and the wages earned towards calculating your social security benefits.
References:
- Form W-2C (PDF), Corrected Wage
and Tax Statement
- Form W-2 (PDF) , Wage and Tax
Statement
I have already filed my return and now I have received another Form
W-2. What can I do?
If you find that you have done any of the following, you should file an
amended return 1) you did not report some income; 2) you claimed deductions
or credits you should not have claimed; 3) you failed to claim some deductions
or credits you are entitled to; or 4) you used an incorrect filing status.
The form you use to correct the Form 1040 (PDF), Form 1040A (PDF), Form 1040EZ (PDF),
or TeleFile you already filed is Form 1040X (PDF), Amended
U.S. Individual Income Tax Return. Please refer to Tax Topic 308, Amended
Returns, for additional information.
For additional information on when, where, and how to file, refer to Tax Topic 301, When, Where, and How to File.
References:
- Form 1040 (PDF), U.S. Individual
Income Tax Return
- Form 1040A (PDF), U.S. Individual
Income Tax Return
- Form 1040EZ (PDF), U.S. Individual
Income Tax Return for Single and Joint Filers with No Dependents
- Form 1040X (PDF), Amended U.S.
Individual Income Tax Return
- Tax Topic 301, When, where, and how to file
- Tax Topic 308, Amended Returns
I just received a corrected W-2 form from my employer. I've already
filed my taxes. What do I need to do now?
If you receive another Form W-2 after your return is filed, you must file
an amended tax return. Use Form 1040X (PDF), Amended
U.S. Individual Income Tax Return, to correct a previously filed Form
1040, 1040A, or 1040EZ.
If you are filing to claim an additional refund, wait until you have received
your original refund. You can cash that check. If you owe additional tax because
of the additional W-2, you should file Form 1040X and pay the additional tax
by April 15 to avoid penalties and interest.
For more tips and information on tax return filing procedures, refer to
Chapter 1 of Publication 17, Your Federal Income Tax.
References:
I received an incorrect W-2 form. I can't get my former employer
to issue a corrected W-2? What should I do?
If your attempts to have an incorrect Form W-2 corrected by your employer
are unsuccessful and it is after February 15th, contact the IRS at (800) 829-1040.
An IRS representative can initiate a Form W-2 complaint. Form 4598, Form W-2
or 1099 Not Received or Incorrect, will be sent to the employer and a copy
will be sent to you along with Form 4852 (PDF), Substitute
for a Missing Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions
from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance
Contracts, etc. The copy that the employer receives will advise him or her
of the employer's responsibilities to provide a correct Form W-2 and of the
penalties for failure to do so. When you call the IRS visit an IRS Taxpayer
Assistance Center (TAC), please have the following information available:
Your employer's name and complete address, including zip code, employer
identification number (if known - see prior year's Form W-2 if you worked
for the same employer), and telephone number,
Your name, address, including zip code, social security number, and telephone
number; and
An estimate of the wages you earned, the federal income tax withheld,
and the period you worked for that employer. The estimate should be based
on year-to-date information from your final pay stub or leave-and-earnings
statement, if possible.
If you file your return and attach Form 4852 to support the withholding
amount claimed instead of a Form W-2, your refund can be delayed while the
information you gave us is verified.
If you receive a Form W-2 after you file your return and it does not agree
with the income or withheld tax you reported on your return, file an amended
return on Form 1040X (PDF), Amended U.S. Individual
Income Tax Return.
References:
4.3 Interest/Dividends/Other Types of Income: 1099–MISC, Independent Contractors, and Self-employed
What is the difference between a Form W-2 and a Form 1099-MISC?
Both of these forms are called information returns. The Form W-2 is used
by employers to report wages, tips and other compensation paid to an employee.
The form also reports the employee's income tax and Social Security and Medicare
taxes withheld and any advanced earned income credit payments. The Form W-2
is provided by the employer to the employee and the Social Security Administration.
A Form 1099-MISC is used by a person engaged in a trade or business to report
payments made in the course of such trade or business to another person or
business who is not an employee. The form is required when payments of $10
or more in gross royalties or $600 or more in rents or services are paid.
The form is provided by the payor to the IRS and the person or business that
received the payment.
References:
4.6 Interest/Dividends/Other Types of Income: Employee Reimbursements, Form W–2, Wage Inquiries
Is tuition reimbursement for school a form of taxable income or
not?
If you receive educational assistance benefits from your employer under
an educational assistance program, you can exclude up to $5,250 of those benefits
each year. This means your employer should not include the benefits with your
wages, tips, and other compensation shown in box 1 of your Form W-2. You do
not have to include the benefits on your income tax return. The exclusion
also applies to educational assistance for graduate level courses.
To qualify as an educational assistance program, the plan must be written
and must meet certain other requirements. Your employer can tell you whether
there is a qualified program where you work.
Tax-free educational assistance benefits include payments for tuition,
fees and similar expenses, books, supplies, and equipment. The payments do
not have to be for work-related courses. Educational assistance benefits do
not include payments for the following items:
(1) Meals, lodging, transportation, or tools or supplies (other than textbooks)
that you can keep after completing the course of instruction.
(2) Education involving sports, games, or hobbies unless the education
has a reasonable relationship to the business of your employer, or is required
as part of a degree program.
References:
For further information, please see,Publication 970 , Tax
Benefits for Education .
Tax Topic 513 Tax Topic 513, Education Expenses
References:
My employer is including amounts paid graduate school related expenses
on my Form W-2. Where do I claim education expenses on my Form 1040?
The law changed in 2002 to allow up to $5,250 in graduate school related
expenses paid by educational assistance program to be excluded from gross
income. If your employer has included amounts paid for graduate school related
expenses amounting to $5,250 or less with your wages, tips, and other compensation
shown in box 1 of your W-2, ask your employer for a corrected W-2. If you
have received amounts for graduate school related expenses that are includable
in gross income, you may deduct expenses attributable to those amounts on Form 1040, Schedule A (PDF), Itemized Deductions.
References:
On my Form W-2, why would line 1, wages, tips, other compensation,
be different from line 3, social security wages, and line 5, medicare wages
and tips?
When the amount in box 1 is less than the amount in boxes 3 and 5, you
have received some employee compensation that is not subject to Federal income
tax but is subject to Social Security and Medicare taxes. The most common
example of this is deferred compensation, e.g. contributions to a 401(k) plan.
Another example is an employee benefit plan that provides for the contribution
of pretax dollars (e.g. cafeteria plan, flexible spending arrangement, dependent
care plan, etc.).
When the amount in box 1 is more than the amount in boxes 3 and 5, you
have received some employee compensation that is not defined as wages for
the purpose of social security and Medicare taxes. An example of this would
be when a child works for his or her parent in the parent's trade or business
and is under age 18.
References:
Is my employer supposed to include mileage reimbursement as a part
of my gross income on my Form W-2, and do I include it on my return as wages,
tips & salaries?
That depends on whether you were reimbursed under an accountable plan or
under a nonaccountable plan. Generally, an employer will have an accountable
plan if it pays business expenses that would otherwise be deductible by the
employee, requires the employee to substantiate the expense, and does not
permit the employee to keep any reimbursements that exceed expenses. If the
employer does not use an accountable plan, mileage reimbursement would be
included in your wages on Form W-2. For more information on reimbursements
and accountable plans, refer to Chapter 6 of Publication 463, Travel,
Entertainment, Gift, and Car Expenses.
If your mileage reimbursement is included in box 1 on Form W-2, you need
to enter that amount on the "wages, salaries, and tips" line of your tax return.
If you itemize your deductions on Form 1040, Schedule A (PDF), Itemized
Deductions, you may deduct the business transportation expense as an
employee business expense, subject to the 2% limitation of adjusted gross
income. You may usually deduct either your actual business automobile expenses
or use the standard mileage rate. For more information on when you may use
the standard mileage rate, refer to Chapter 4 of Publication 463, Travel,
Entertainment, Gift, and Car Expenses.
References:
What box on the Form W-2 do I use to determine my income to go on
my tax return? What are all of these other boxes for? Does the amount from
any other box go anywhere on my tax return?
For most people, only the amount in box 1 (wages, tips, other compensation)
needs to be reported as income on your tax return. If you are an employee
who receives tips, you may have to include the amount from box 8 (allocated
tips) as income on your return.
Any employer-provided dependent care benefits listed in box 10 that are
not excludable from income must be reported as wages on line 7 of the Form
1040. Any credit taken for child and dependent care expenses must be reported
on line 44 of the Form 1040. Refer to Form 2441 (PDF), Child
and Dependent Care Expenses, to determine the amount, if any, of the
exclusion or credit.
Employer-provided adoption benefits that must be included on line 18 of Form 8839 (PDF), Qualified Adoption Expenses, appear in box
12 with a code T. Employer contributions to a medical savings account (MSA),
which you report on line 3b of Form 8853 (PDF), Medical
Savings Accounts and Long-Term Care Insurance Contracts, also appear
in box 12 with a code R. Employer-provided benefits may be taxable as compensation
under certain conditions. Refer to the relevant form instructions.
If you received advanced earned income credit payments from your employer
(box 9), you must include the amount on your individual income tax return
Form 1040 or 1040A.
The other boxes either display information that the employer wanted to
provide to you, or contain information that must be reported to the Social
Security Administration or to the IRS.
References:
What is meant by "dependent care benefits" (Box 10 of Form W-2)?
Dependent care benefits are amounts your employer paid directly to either
you or your care provider for the care of your qualifying person(s) while
you worked. They also include the fair market value of care in a day-care
facility provided or sponsored by your employer. Dependent care benefits include
amounts placed into a flexible spending account under a salary reduction arrangement
if the benefit provided was day care. If you have an amount in Box 10 of the Form W-2 (PDF), you must complete Form 2441, Child and Dependent Care Expenses (PDF) when you file the Form 1040.
If you file the Form 1040A (PDF), complete Schedule
2.
References:
Should Line 10, Dependent Care Benefits, of my Form W-2 be included
when calculating my income?
A portion of the amount in Box 10 of the Form W-2 may be includable in
your income. Please refer to the
Instructions for Form 2441, Child
and Dependent Care Expenses, to determine how much, if any, of the dependent
care benefits may be excluded. If you meet the requirements described in Form 2441 (PDF), Child and Dependent Care Expenses,
you can exclude up to $5,000 of dependent care benefits provided under a qualified
employer plan. However, this amount is reduced or eliminated if your earned
income (or your spouse's earned income) is less than $5,000, or if your child
is not under age 13. Any benefits that exceed the exclusion limit ($5,000)
are also includable in your income, and your employer should have included
these amounts in Boxes 1, 3, and 5 of your Form W-2 in addition to reporting
these amounts in Box 10. The amount you can exclude is figured and claimed
by completing Part III of Form 2441 or Schedule 2 of Form 1040A.
References:
4.12 Interest/Dividends/Other Types of Income: Tips
My Form W-2 includes allocated tips. What are they and how are they
taxed?
Certain employers must allocate tips if the percentage of tips reported
by employees falls below a required minimum percentage of gross sales. To
"allocate tips" means to assign an additional amount as tips to each employee
whose reported tips are below the required percentage. For additional information
on how the rules for tip allocation work, refer to Chapter 7 of Publication 17, Your
Federal Income Tax. All tips you receive are taxable. If you do not have
adequate records for your actual tips, you must include the allocated tips
shown on your Form W-2 (PDF) as additional tip income
on your return. You must also complete and attach Form 4137 (PDF), Social Security and Medicare Tax on Unreported Tips.
For more information on the requirements, refer to Tip Allocation in Publication 531, Reporting Tip Income. Refer to Tax Topic 402, Tips, for
other important information.
References:
My employer included allocated tips on my W-2 in box 1. The allocated
tips included were higher than I actually received. Do I have to pay taxes
on money I never received?
Allocated tips are reported in box 8 of Form W-2 and should not be included
in the amount in box 1. If they have been included in box 1, you need to get
a corrected Form W-2 from your employer.
By including the tip amount in box 1, the employer has indicated that this
is the tip amount you reported monthly and that Social Security tax and Medicare
taxes have been withheld (unless an amount indicating otherwise appears in
box 12). Your copies of your monthly tip reports and your daily tip log will
enable you to document that you reported a different tip amount if the W-2
income continues to be disputed. If you do not receive a corrected W-2, enter
the amount of wages and tips you believe to be correct on line 7 of Form 1040.
Keep your tip records to support the amount you reported.
You normally must report allocated tips (box 8, Form W-2) as income on
line 7 of your Form 1040 unless you have a daily tip record documenting that
you actually received less tips than the amount allocated to you. If you have
adequate documentation of your actual tip amount, include only the amount
of tips that were actually received and reported to your employer. This additional
amount of tip income, whether it is allocated tips or unreported tips, has
not had income tax, social security tax or Medicare taxes withheld. To correct
this, the tips should also be entered on Form 4137 (PDF), Social
Security and Medicare Tax on Unreported Tips. Enter the tax from Form
4137 on line 56 of Form 1040 and attach Form 4137 to your return.
References:
12.2 Small Business/Self-Employed/Other Business : Form 1099–MISC & Independent Contractors
What is the difference between a Form W-2 and a Form 1099-MISC?
Both of these forms are called information returns. The Form W-2 is used by employers
to report wages, tips and other compensation paid to an employee. The form also reports
the employee's income tax and Social Security taxes withheld and any advanced earned
income credit payments. The Form W-2 is provided by the employer to the employee and
the Social Security Administration. A Form 1099-MISC is used to report payments made
in the course of a trade or business to another person or business who is not an employee.
The form is required among other things, when payments of $10 or more in gross royalties
or $600 or more in rents or services are paid. The form is provided by the payor to
the IRS and the person or business that received the payment.
References:
How do you determine if a person is an employee or an independent contractor?
The distinction between whether a worker is an employee or an independent contractor
has important tax consequences. Worker classification affects how you pay your Federal
income tax, social security and Medicare taxes, and how you file your tax return.
The classification also affects your eligibility for employee benefits. Those who
should be classified as employees, but aren't, may lose out on workers' compensation,
unemployment benefits, and, in many cases, group insurance (including life and health),
and retirement benefits.
Certain workers are considered employees by statute for purposes of the Federal
Insurance Contributions Act (FICA), the Federal Unemployment Tax Act (FUTA), or for
federal income tax withholding from wages. Examples of workers considered employees
by statute include corporate officers, certain agent, or commision-drivers, full-time
life insurance sales persons, certain home workers, certain traveling of city sales
persons.
Where there is no controlling statute, a worker's status is determined by applying
the common law test, which applies for purposes of FICA, FUTA, Federal income tax
withholding, and the Railroad Retirement Tax Act. A worker's status under the common
law test is determined by applying relevant facts that fall into three main categories:
behavioral control, financial control, and the type of relationship itself. In each
case, it is very important to consider all the facts - no single fact provides the
answer.
BEHAVIORAL CONTROL: These facts show whether there is a right
to direct or control how the worker does the work. A worker is an employee when the
business has the right to direct and control the worker. The business does not have
to actually direct or control the way the work is done -- as long as the employer
has the right to direct and control the work. For example:
Instructions -- if you receive extensive instructions on
how work is to be done, this suggests that you may be an employee. Instructions can
cover a wide range of topics, for example: how, when, or where to do the work, what
tools or equipment to use, what assistants to hire to help with the work, and where
to purchase supplies and services. If you receive less extensive instructions about
what should be done, but not how it should be done, you may be an independent contractor.
For instance, instructions about time and place may be less important than directions
on how the work is performed.
Training -- if the business provides you with training about
required procedures and methods, this suggests that the business wants the work done
in a certain way, and you may be an employee.
FINANCIAL CONTROL: These facts show whether there is a right
to direct or control the business part of the work. For example:
Significant Investment -- if you have a significant investment
in your work, you may be an independent contractor. While there is no precise dollar
test, the investment must have substance. However, a significant investment is not
necessary to be an independent contractor.
Expenses -- if you are not reimbursed for some or all business
expenses, then you may be an independent contractor, especially if your unreimbursed
business expenses are high.
Opportunity for Profit or Loss -- if you can realize a profit
or incur a loss, this suggests that you are in business for yourself and that you
may be an independent contractor.
RELATIONSHIP OF THE PARTIES: These are facts that illustrate
how the business and the worker perceive their relationship. For example:
Employee Benefits -- if you receive benefits, this is an
indication that you are an employee. If you do not receive benefits, however, you
could be either an employee or an independent contractor.
Written Contracts -- a written contract may show what both
you and the business intend. This may be very significant if it is difficult, if not
impossible, to determine status based on other facts.
If you are not sure whether you are an independent contractor or an employee, complete Form SS-8 (PDF), Determination of Employee Work Status for Purposes
of Federal Employment Taxes and Income Tax Withholding. Publication 1779 (PDF), Employee Independent Contractor Brochure, andPublication 15-A (PDF) , Employer's Supplemental Tax Guide,
provide additional information on independent contractor or employee status.
For information on the tax responsibilities of self-employed persons, refer to Publication 505, Tax Withholding and Estimated Tax, and Publication 533, Self-Employment
Tax.
References:
- Publication 15-A (PDF), Employer's
Supplemental Tax Guide
- Publication 505, Tax Withholding and Estimated Tax
- Publication 533, Self-Employment Tax
- Publication 1779, Employee Independent Contractor Brochure
- Form SS-8 (PDF), Determination of Employee
Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding
- Tax Topic 762, Independent contractor vs. employee
12.3 Small Business/Self-Employed/Other Business : Form W–2, FICA, Medicare, Tips, Employee Benefits
I started a new business. I need information on how to file Forms W-2?
First of all, Form W-2 (PDF) should be furnished to your
employees by January 31. It is also your responsibility as an employer to file Forms
W-2 with the Social Security Administration (SSA) for your employees, showing wages
paid and taxes withheld for the year. You must send Copy A to the SSA with Form W-3 (PDF) by February 28. If you file electronically (not by magnetic
media) the due date is March 31. Form W-3 shows the total of all W-2s being sent.
The address is listed in the
Instructions for Form W-2 and W-3. Refer
to Tax Topic 752, Form W-2 - Where, When and How to File, or Publication 15, Circular E, Employer's Tax Guide.
References:
I sold my business and the new owners kept the employees. What is my requirement
as the former owner for filing Forms W-2 for the employees?
If the new owner acquired substantially all of your business property and retained
your employees, you may need to file a final Form 941 (PDF), Employers
Quarterly Federal Tax Return . The final Form 941 generally must be filed on
or before the last day of the first calendar month following the quarter for which
the return is made. You will need to furnish Forms W-2 to your employees by the time
you are required to file the final Form 941. You will also need to file Forms W-2
and W-3 on or before the last day of the second calendar month following the period
for which the final Form 941 is filed.
If you and the new owner agree, you can be relieved of furnishing Forms W-2 to
the employees and filing Forms W-2 and W-3 with the Social Security Administration.
Such an agreement would be allowed if the employees will be paid wages by the new
owner in the same calendar year and the Forms W-2 furnished to these employees will
contain the required information , i.e. wages paid and taxes withheld, from both employers.
The new employer will furnish Forms W-2 to the employees and will also file the required
Forms W-2 and W-3 with the Social Security Administration. These actions will follow
the normal end-of-year time lines. You will remain responsible for the Form W-2 and
W-3 reporting obligations for the employees who are not employed by the new owner.
Please refer to Revenue Procedure 96-60 for a full discussion of this
situation.
References:
Is it possible to get an extension for sending out W-2 forms? I was told
the deadline is February 28th.
There are two deadlines for sending our Form W-2. You must furnish Form W-2 to
your employees by January 31. To get an extension of the time to furnish your employees
with Form W-2 you must send a letter on or before January 31st requesting the extension.
Refer to the
Instructions for Form W-2 and W-3 for the information
that must be in the letter and mailing instructions.
The deadline for sending Forms W-2 with a Form W-3 to the Social Security Administration
is the last day of February. If you terminate your business the date may be different.
To get an extension of time to mail the Forms W-2 to the Social Security Administration
file Form 8809 (PDF), Request for Extension of Time
to File Information Returns, before the due date of the Forms W-2. If approved,
you will have an additional 30 days to file.
References:
When an employer provides day care assistance, should the employer's contribution
be reported in box 10 of Form W-2?
Yes. An employer reports dependent care assistance payments in box 10 on Form W-2.
References:
If our company pays for the employee's health care costs directly to the
medical facility, as opposed to a reimbursement, is the employee benefit reported
on Form W-2 and subject to social security withholding?
Health care costs paid directly to the medical facility is normally a nontaxable
employee benefit provided that it is paid as part of an accident and health plan.
Refer to Publication 535, Business Expenses, for more information on
employee benefit programs.
References:
How should a tuition reimbursement program for employees be reported as
income to an employee? Should the employee be taxed at the 27%, 25% rate for payments
made after May 28, 2003, rate for supplemental payments on the next pay check after
successful completion of the course or is this something that we just include on the
W-2?
If the tuition reimbursements do not qualify as a tax free fringe benefit under
the rules for Educational Assistance Programs or as a Working Condition Fringe Benefit,
the tuition reimbursement is wages for Federal Income Tax, Social Security, and Medicare
Tax purposes.
For employment tax and withholding purposes, you can treat fringe benefits as paid
on a pay period, a quarter, a semiannual, annual, or other basis as long as the benefits
are treated as paid no less frequently than annually. You do not have to choose the
same period for all employees.
You can change the period as often as you like as long as you treat all the benefits
provided in a calendar year as paid no later than December 31. You can also treat
the value of a single fringe benefit as paid on one or more dates in the same calendar
year, even if the employee receives the entire benefit at one time.
You can add the value of fringe benefits to regular wages for a payroll period
and figure income tax withholding on the total, or you can withhold Federal income
tax on the value of fringe benefits at the flat 27% (25% rate for payments made after
May 28, 2003) applicable to supplemental wages. You must withhold the applicable income,
social security, and Medicare taxes on the date or dates you chose to treat the benefits
as paid. Deposit the amounts withheld as discussed in section 11 of Publication 15, Circular
E, Employer's Tax Guide .
References:
12.5 Small Business/Self-Employed/Other Business : Form SS–4 & Employer Identification Number (EIN)
Is an employer identification number (EIN) required if the husband and wife
are the only persons working in the business?
If both of you carry on a business together and share in the profits and losses,
you are a partnership and each would receive a Form 1065, Schedule K-1 (PDF) that
is important for determining your self-employment income. If you work for your spouse,
you should receive a Form W-2, showing taxes withheld and the owner spouse would claim
the wages paid to you as a deduction. Both a partnership and a sole proprietor with
an employee must have an EIN.
References:
12.6 Small Business/Self-Employed/Other Business : Forms 941, 940, Employment Taxes
We are about to hire employees and need to know how much tax to take out
and where to send this money?
You will need to secure a completed Form W-4 (PDF), Employee's
Withholding Allowance Certificate, from each employee. You will need Publication 15, Circular E, Employer's Tax Guide, and Publication 15-A (PDF), Employer's Supplemental Tax Guide, to determine
the amount of withholding and for directions on depositing the withholding amounts
and other employment taxes. Publication 15T, New Withholding Tables contains
the revised withholding tables. The change is a result of the Jobs and Growth Tax
Relief Reconciliation Act of 2003. This publication is a supplement to Publication
15.
Generally, employers will quarterly file Form 941 (PDF), Employer's
Quarterly Federal Tax Return, and annually file Form 940 (PDF), Employer's Annual Federal Unemployment Tax Return (FUTA), and Form W-2 (PDF), Wage and Tax Statement, with Form W-3 (PDF), Transmittal of Income and Tax Statements.
References:
- Publication 15, Circular E, Employer's Tax Guide
- Publication 15-A (PDF), Employer's
Supplemental Tax Guide
- Form 940 (PDF), Employer's Annual Federal
Unemployment Tax Return
- Form 941 (PDF), Employer's Quarterly
Federal Tax Return
- Form W-2 (PDF), Wage and Tax Statement
- Form W-3 (PDF), Transmittal of Income
and Tax Statements
- Form W-4 (PDF), Employee's Withholding
Allowance Certificate
- Publication 15-T (PDF) , New Withholding
Tables (For wages Paid Through December 2004)
14.4 Electronic Filing (e-file) and TeleFile: Forms W–2 & Other Attachments
If I file electronically, what do I do with my W-2 forms?
When filing electronically you must provide Form W-2 (PDF) to
the authorized IRS e-file provider before the provider sends the electronic return
to the IRS. In addition, you should keep them in a safe place with a copy of your
tax return. For general information about e-file, refer to Tax Topic 252, Electronic
Filing.
References:
15. Magnetic Media Filers:
I have a small business. Who is required to file Forms W-2 electronically?
Any person, including corporations, partnerships, employers, estates, and trusts,
who files 250 or more information returns of any Form 1042-S (PDF),
Form 1099, Form 1098 (PDF), Form 5498 (PDF), Form 8027 (PDF), Form W-2 (PDF) , or Form W-2G (PDF) for any calendar year, must
file these returns electronically or magnetically. For more information, refer to Tax Topic 801, Who Must File Magnetically, or Tax Topic 805, Electronic
Filing of Information Returns.
References:
- Form 1042-S (PDF), Foreign Person's
U.S. Source Income Subject to Withholding
- Form 8027 (PDF), Employer's Annual Information
Return of Tip Income and Allocated Tips
- Form 1098 (PDF), Mortgage Interest Statement
- Form 5498 (PDF), IRA and Coverdell ESA
Contribution Information
- Form W-2 (PDF), Wage and Tax Statement
- Form W-2G (PDF), Certain Gambling Winnings
- Tax Topic 801, Who Must File Magnetically
- Tax Topic 805, Electronic Filing of Information Returns
|
|
|
|
