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2023 IRS Form W-2: Employer Instructions and Tax Deadline Changes

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IRS Form W-2 for 2023 Tax Year: W-2 Form Employer Instructions and Tax Deadline Changes in 2024

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As we embark on the 2023 tax year, it's important for employers to stay informed about the 2023 IRS Form W-2 and the associated 2024 tax deadline changes. This comprehensive guide will provide an overview of the form, employer instructions, essential information about filing, common FAQs, employer responsibilities, and the advantages of electronic submission. Let's dive into the 2023 IRS Form W-2 details and equip you with the knowledge to navigate the tax season efficiently.

What is a W-2 Form? What Does the W-2 Form Tell You?

The IRS Form W-2, officially known as the Wage and Tax Statement, is an indispensable IRS form. Employers use it to report an employee's annual income and taxes withheld. This form is vital for employees as it provides necessary details for filing federal and state taxes. Each W-2 form includes information like wages earned, federal and state income tax withheld, social security wages, Medicare wages, and other deductions. Employers must issue a copy of this form to both the employee and the IRS, ensuring accurate tax reporting and compliance with federal regulations.

Key Changes in Form W-2 for 2023 Tax Year

Each year, the IRS may introduce changes to tax forms, and 2023 is no exception. For the 2023 tax year, it's crucial to be aware of any alterations in the W-2 form, such as updates in tax rates, adjustments in withholding calculations, or the addition of new boxes for specific tax-related data. These updates can impact how wages and taxes are reported. Keeping abreast of these changes is vital for both employers and employees to ensure precise tax filings.

The Deadline for W-2 Filing in 2024: What You Need to Know

The filing deadline for Form W-2 is a critical date for employers. Typically, this deadline falls on January 31st of the year following the tax year. For the 2023 tax year, employers must submit W-2 forms to the Social Security Administration (SSA) and distribute them to employees by January 31, 2024. Missing this deadline can lead to penalties, making it imperative for employers to plan ahead and ensure timely submission.

When Should You Receive Your W-2 Form from Your Employer?

You should receive your W-2 form from your employer by January 31st of each year, as this is the deadline set by the IRS for employers to issue these documents. This deadline applies to both electronic and mailed forms. If January 31st falls on a weekend or holiday, the deadline extends to the next business day. If you do not receive your W-2 by this date, it's advisable to contact your employer promptly to inquire about the delay.

How to File Form W-2: Step-by-Step Instructions

Filing Form W-2 requires meticulous attention to detail. Employers must gather comprehensive employee information, including social security numbers, and accurately calculate wages and withholdings. The process involves reporting federal income, social security wages, Medicare taxes, and any state or local taxes withheld. Employers have the option to file these forms either electronically or by mail. E-filing is encouraged by the IRS for its efficiency and is mandatory for employers filing 250 or more forms.

Box Description Instructions
a Employee's social security number (SSN) Enter the employee's nine-digit SSN without hyphens. Do not truncate the SSN.
b Employer identification number (EIN) Enter the employer's 10-digit EIN.
c Employer's name, address, and ZIP code Enter the employer's legal name, address, and ZIP code.
d Control number Enter a unique control number for each employee. The control number must be different from the employee's SSN.
e Employee's name Enter the employee's first name, middle initial, and last name.
f Employee's address Enter the employee's address, including city, state, and ZIP code.
1 Wages, tips, other compensation Enter the total amount of wages, tips, and other compensation paid to the employee during the year.
2 Federal income tax withheld Enter the total amount of federal income tax withheld from the employee's wages during the year.
3 Social security wages Enter the total amount of wages subject to Social Security tax paid to the employee during the year.
4 Social security tax withheld Enter the total amount of Social Security tax withheld from the employee's wages during the year.
5 Medicare wages and tips Enter the total amount of wages and tips subject to Medicare tax paid to the employee during the year.
6 Medicare tax withheld Enter the total amount of Medicare tax withheld from the employee's wages and tips during the year.
12 Codes Enter any applicable codes for the employee, such as the employee's retirement plan code or the employee's health insurance plan code.
13 Employee's state or local income tax withheld Enter the total amount of state or local income tax withheld from the employee's wages during the year.
14 Employee's name and address (if requested by state or local government) Enter the employee's name and address if requested by state or local government.
15-20 Additional state or local tax information Enter any additional state or local tax information required by state or local government.

Why is it Necessary to have a W-2 or 1099 Form When Using Tax Preparation Software?

The necessity of having a W-2 or 1099 form when using tax preparation software lies in the accuracy and completeness of tax filing. These forms contain essential information about an individual's income, taxes withheld, and other pertinent financial data. Tax preparation software uses this information to accurately calculate tax liability or refunds. Without these forms, the software cannot provide a comprehensive and compliant tax return, potentially leading to errors or omissions in the tax filing process.

Understanding Box 12 on Form W-2

Box 12 on the W-2 form is particularly important because it contains various codes reflecting different types of compensation and benefits. These codes, ranging from A to FF, report items like retirement plan contributions, nontaxable income, and other benefits. For example, Code D represents elective deferrals to a 401(k) plan, while Code W shows employer contributions to a health savings account (HSA). Understanding these codes is essential for both employers and employees, as they directly affect taxable income and tax liability.

Understanding Box 14 on Form W-2

Box 14 on Form W-2 is a flexible section used by employers to report additional information, such as state disability insurance premiums, union dues, employee-paid health insurance premiums, educational assistance payments, and charitable contributions through payroll deduction. This box is crucial for providing employees with detailed information that may have tax implications and for assisting in personal financial planning. Employers are responsible for clearly labeling each item and ensuring the accuracy of the reported information, as it can significantly impact an employee's understanding and tax reporting.

Common Errors to Avoid When Filing W-2 Forms

Filing W-2 Forms with the IRS can be prone to errors, which can cause significant issues for both employees and employers. Common mistakes include incorrect social security numbers, errors in wage or tax calculations, and failing to provide complete information. It's crucial for employers to meticulously review these forms before submission to avoid any potential complications or delays in their employees' tax filings.

E-Filing vs. Mailing: Which Is Better for IRS Form W-2 Submission?

The decision between e-filing and mailing W-2 forms depends largely on the size of the business and the number of forms to be filed. E-filing is generally preferred for its convenience, quick processing, and enhanced security. It also provides instant confirmation of receipt. Mailing, while still a viable option, is typically slower and better suited for smaller businesses with fewer forms to file.

What to Do If You Don’t Receive Your W-2 Form

If an employee doesn't receive their W-2 form by the end of January, the first step is to contact the employer. If the form is still not received after this, the employee can reach out to the IRS for assistance. In cases where the W-2 is unavailable, Form 4852 can be used as a substitute to file a tax return. It's important to act promptly in these situations to avoid delays in tax filing.

Penalties for Late or Incorrect W-2 Filings

The IRS takes the timely and accurate filing of W-2 forms very seriously, and as such, imposes penalties for any deviations from compliance. These penalties for late, incorrect, or unfiled W-2 forms can significantly impact a business financially, and they vary based on the size of the business and the length of time the filing is delayed.

Key Takeaways

  • IRS Form W-2 for 2023: Understand the essentials of Form W-2 for the 2023 tax year, crucial for reporting employee wages and withholdings.
  • Deadline and E-filing: W-2 deadline is crucial; employers must file by January 31, 2024.
  • Contacting IRS and Employers: If you don’t receive your W-2, contact your employer first and then the IRS at 800-829-1040 for assistance.
  • Form 4852, a Substitute for Form W-2: Use Form 4852 if you don’t receive your W-2. It's important for accurately reporting wages and taxes.
  • Social Security Number Accuracy: Ensure your Social Security Number is correctly listed on your W-2 to avoid common errors in tax filing.
  • Understanding Social Security Wages and Medicare Taxes: Familiarize yourself with how your W-2 reports social security wages and Medicare taxes.
  • Providing Employee Copies: Employers must ensure employees receive their W-2s, either by mail or electronically.
  • Considerations for Business Owners: Business owners need to pay attention to state and federal requirements for W-2 filing.
  • W-2 Extensions and Penalties: Be aware of the process to request an extension and the penalties for failure to file W-2s on time.
  • W-2 Box 12 and Other Listings: Understand the significance of Box 12 and other listings on the W-2 for reporting specific tax information.
  • Utilizing a Service Provider: Taking advantage of a service provider can streamline the W-2 e-filing process and help avoid penalties.
  • Importance of Accurate Filing: It's important to note the need for accuracy in filing forms to represent wages and withholding correctly.
  • Related Resources: Look for related blogs, FAQs, and resources to understand the nuances of W-2 forms for employees and employers alike.
  • Filing Options: There are two options for filing W-2s: electronically (e-file) or by mail, with e-filing often being more efficient.
  • New Form Updates: Stay informed about any new form updates or changes for the 2023 tax year to ensure compliance and accurate tax reporting.
  • Advantages of E-Filing: Utilizing the e-filing process offers advantages like faster processing and confirmation of receipt by the IRS.
  • Employee’s Responsibility: It's crucial for employees to review their W-2s to ensure their social security wages and other details are correct.
  • 'Here's What to Do' Guidance: If you’re an employee who hasn’t received a W-2, here’s what you can do: first, contact your employer, and if unresolved, reach out to the IRS.
  • January Filing Emphasis: The focus on filing W-2s in January is to ensure timely tax filing, allowing employees to file their personal taxes accurately.
  • Navigating Common Errors: Be proactive in understanding common errors on W-2s, like incorrect social security numbers or wage listings.
  • Employers’ Obligation for Accurate Reporting: Employers must file accurate W-2s reflecting employees’ wages and withholdings, including social security and Medicare taxes.
  • Understanding Box 12 on W-2: Box 12 contains various codes representing different types of compensation and benefits; understanding these is key for accurate filing.
  • Extension Requests: Know the process for requesting an extension to file W-2s if you're unable to meet the January 31 deadline.
  • State and Federal Compliance: Ensure compliance with both state and federal guidelines when filing W-2 forms to avoid legal complications.
  • Implications of Filing Late: Understand the implications of filing W-2s later than January 31, including potential penalties and impacts on employees’ tax filings.
  • Filing Forms – Mail vs. Electronic: Weigh the pros and cons of filing forms either by mail or electronically; e-filing is often faster and more secure.
  • 800-829-1040: IRS Contact for Queries: Use this number to contact the IRS for any queries or issues related to W-2 forms or tax filing.
  • Service Providers as a Resource: Leverage service providers as a resource for simplifying the process of filing W-2s and ensuring compliance.
  • Avoiding Penalties: Familiarize yourself with steps to avoid penalties related to late or incorrect filing of W-2 forms.
  • Business Owners’ Role: Business owners have a pivotal role in ensuring timely and accurate filing of employees’ W-2s.
  • Need for Paying Attention to Details: It’s critical for both employers and employees to pay attention to details on the W-2 to ensure taxes are reported and paid accurately.

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published

November 16, 2023

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Steven de la Fe, CPA

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