Form W3 from the IRS is a summary of your employee's earnings and tax deductions. Everyone needs to file form W3 with the SSA (Social Security Administration), as they use it to confirm that you are paying your taxes correctly.
All workers get the W2 form in January, which reveals the previous year's entire wages and tax deduction. IRS form W3 is like a cover sheet to form W2, which sums up the wages and tax withholding present on the W2 and W3.
Form W3 is essential for small business taxes as it helps you have access to all taxes paid by the employee in a single position.
Where Employee can Get Access to Form W3
It is possible to get Form W3 from Uncle Sam online via their ordering site. You can also get your paper copy wherever you get copies of the W2 form. Also, you have to print the W3 form using special red ink. There might be a penalty for submitting it with another ink.
How Small Businesses can Fill Form W3
Step 1: Fill your W2s
W2 is the prerequisite for W3; hence you must fill W2 for your entire staff before proceeding to W3. The date on each W2 can be used on Form W3.
Freelancers and other independent contractors use Form 1099-NEC rather than W2. Besides, employees need to have filled the Form W4 during the onboarding process to qualify for W2.
Step 2: Understand the Instructions
The instructions are essential when filling form W3.
One of the most important instructions is that you only need to worry about Form W3 when filling the Form w2 by mail. On filing electronically, you automatically get W3 generated by the SSA business service.
Also, the number of employees you have determines if you will file W3 by mail. Most of the W3 instructions are present on the Uncle Sam website. A Few of them are:
You file Form W3 online if your employees are above 250. On filing electronically, SSA creates the form W3 automatically.
A single form W3 can take care of up to 50 employees. You will, however, use multiple forms W3 if you have between 50 and 250 employees.
Step 3: Input all essential business information from Boxes A to H
Step 4: Add Up the W2
Going with each box, sum up the W2 for each employee and input in the box that tally on Form W3.
Commence with the first box – the total wages. Proceed to each worker’s W2, get box one and sum it up. You will enter the value in box one of Form W3. Proceed until box 19.
Ensure you always have a record of your tax calculation. You can employ a spreadsheet to arrive at the total value for all corresponding W 3 amounts.
Step 5: Go over the entire information.
Next is to crosscheck the information. Ensure you have correct calculations and watch for accidental transposing of numbers
When you are sure there is no error, enter your contact info at the bottom of the form. You can amend any error you discover later using form W3c.
Step 6: File both W3 and W2 together
After filling Form W3, it is time to file with the Social Security Administration. Ensure you file form W2 and W3 together. You don’t have to fill out Form W3 for people filing electronically as it will be filled automatically on submitting Forms W2.
Deadline for Form W3
All forms W2 and W3 need to be filed by the end of January the following year. Once you complete them, send them to the SSA. Your workers will also get a copy of their W2 forms.
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