Some employers decide that the best way to pay their business’s employees with a W-2 form is with an hourly wage. Issue IRS Form W-2 for each of your employees on an annual basis. Enter each applicable employee’s:
- Name
- Address
- Gross wages
- The amount of income taxes withheld from the wages
For tax year 2025, the Internal Revenue Service has established that Forms W-2 and 1099 will not be altered to reflect One Big Beautiful Bill-related changes. The tax year is regarded as the transition period for the new information on OBBB’s reporting requirements for:
- Cash tips
- Qualified overtime compensation
Send employees a copy of Form W-2 each January for the previous year. File a separate copy to the Social Security Administration.
Step 1: Collect employee information
You will need to gather all of your employee:
- Names
- Addresses
- Social Security numbers
- Wages
- Tax withholding statuses
Step 2 – Order or generate W-2 forms
Get as many of these forms as you will need for the upcoming tax season. Using tax software to generate forms is a great way to save money and resources by not ordering too many of an IRS form. Do not print out any of the informational forms located on the IRS’ website for use.
Step 3 – Enter the previous year’s total hourly wages
Input the federal taxes withheld from your employee’s wages. The third and fourth sections are dedicated to Social Security wages and withholdings. Make sure to enter in your fifth and sixth sections of the form:
- Medicare wages
- Tips
- Withholdings
Finish the form by reporting any tips to the Social Security Administration.
Step 4 – Include your state’s tax information
Information that you will need to gather and input for this step includes:
- The abbreviated state name
- Your state ID number
- The total paid state wages and taxes
Enter local wages, tips, and withholdings afterwards.
People Also Ask
- Can I use software to generate W-2 forms? – Yes, using tax software is the best way to generate as many W-2 forms as you need while maintaining accuracy and compliance.
- Can I file W-2 forms electronically if I have a small number of employees? – Yes, you do not need to have a lot of employees to e-file your W-2 forms. Just make sure to get W-2 software that supports your business’s size and can adapt to its needs.
We handle data entry and storage for W-2 forms with our W-2/1099 Forms Filer. Download our free 1099-etc Demo software to learn more.