I started a new business. I need information
on how to file Forms W-2.
First of all, Forms W-2 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 by February 28. Form W-3 shows the total of all W-2's
being sent. The address is listed in the W-2 instructions. See Tax
Topic 752, Form W-2 - Where, When and How to File, or
Publication 15, Circular
E, Employer's Tax Guide, and Publication 393, Federal Employment Tax Forms.
One of my employees gave me a W-4 form claiming
exemption from withholding. Do I have to send the W-4 to the IRS?
If you receive a Form W-4 on which an employee claims exemption from
withholding and his or her wages would normally be expected to exceed $200
or more a week, you must send a copy of that W-4 to the IRS service center
with your next Form 941 return or with a cover letter. The IRS will send
you further instructions if it is determined that you should not honor
the Form W-4. For additional information on Form W-4, refer to Tax
Topic 753 and/or Publication
15, Circular E, Employer's Tax Guide.
How do I figure the amount of advance earned
income credit to include in an employee's pay?
To figure the credit amount, use either the Tables for Percentage
Method or Tables for Wage Bracket Method of Advance EIC Payments which
are located in Publication 15,
Circular E, Employer's Tax Guide. Add the advance earned income
credit payments to the employee's net pay for the pay period. Since the
EIC isn't wages, you do not withhold any income, social security, or Medicare
taxes from the payment. For additional information, refer to Tax
Topic 754, Form W-5 - Advance Earned Income Credit and/or Publication
15, Circular E, Employer's Tax Guide.
How do I apply for an employer identification
number (EIN)?
To obtain an EIN, you must complete Form
SS-4. After you have completed the Form SS-4, you can get the EIN by
mail, FAX, or by phone. The instructions for Form SS-4 provide both an
IRS service center address and a phone number for Tele-TIN. For more information,
refer to Tax Topic 755, Employer Identification
Number (EIN) - How to Apply, or Publication 1635, Understanding
Your EIN.
I hired a baby-sitter to care for my children
in my home. Do I need to withhold taxes on her wages?
Household employees include housekeepers, maids, baby- sitters, gardeners,
and others who work in or around your private residence as your employees.
If you pay a household employee cash wages of $1,000 or more in a calendar
year, you generally must withhold social security and Medicare taxes from
all cash wages you pay to that employee. For specific information refer
to Tax Topic 756, Employment Taxes for Household
Employees, or Publication 926,
Household Employer's Tax Guide.
What is the federal unemployment tax rate
for 1998?
The gross federal unemployment tax rate for 1998 is 6.2% and is still
figured on the first $7,000 of wages you paid each employee in 1998. However,
if you have timely paid state unemployment contributions on the same wages,
you can be eligible for a credit. For specific information, refer to Tax
Topic 760, Form 940/940EZ - Employer's Annual Federal Unemployment
Tax Returns.
If my part-time employees receive less than
$20 a month in tips, are they required to report them to me?
Employees who receive less than $20 per month in tips are not required
to report the tips to the employer, but they must include them in gross
income on their tax return. For additional information on tip withholding
and reporting requirements, refer to Tax Topic 761 and/or Publication
15, Circular E, Employer's Tax Guide.
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