Years ago, W-2 forms were fairly straight-forward, reporting wages paid to your employees along with tax withholdings. The days of simple W-2’s are long gone! Wages reported in boxes 1, 3 and 5 for income, social security and Medicare tax withholdings are frequently 3 different amounts – and confusing to your employees. The number of IRS required alphabetical “codes” in Box 12 range from “A to Z”, and are now on “round 2” of the alphabet with “codes” AA- FF”. Box 12, Code “DD” reports the combined employer – employee cost of employer – sponsored health insurance premiums for 2017 and is for information purposes only (only required by employers who issued over 250 W-2 forms for 2016).
Ever had an employee ask you a question about amounts reported on their annual W-2 form?
AccuPay has prepared a memo titled “How To Read Your W-2”. Feel free to download the document and provide copies to your employees and colleagues.
Our recommendations to employers about their 2017 employee W-2’s are as follows:
- Download the “How to Read Your W-2” and read it before you provide 2017 W-2’s to your employees. This memo will answer many of your employees’ questions about their W-2 forms; and
- Box 14 on the W-2 form provides employers with an opportunity to report “non-required” payroll information to employees. We have included examples of Box 14 reporting on our downloaded memo.
2018 Federal Withholding Tax
The IRS has instructed employers to use their newly released 2018 tax tables (lower tax rates) and employees’ 2017 W-4 forms for income tax withholding in 2018, which is exactly what AccuPay is currently doing. We are hopeful that the IRS will soon revise the W-4 form for year 2018 since “exemptions/allowances” reported on W-4 forms are no longer consistent with the 2018 Tax Cuts and Jobs Act new tax law (which eliminated personal tax exemptions as deductions). We will promptly update you about any 2018 tax withholding/Form W-4 changes if/when they occur.
We have a passion for “payroll excellence”. We love ideas from our clients on how we can improve our services. Call us at 317-885-7600 or email Larry@accupay.com with your ideas/input on how to improve our services!