Although the W-2 is primarily a statement of wages, tips, and compensation earned, unlike a 1099, it catalogs the full range of payroll taxes and federal income tax withheld by an employer for each individual employee. When a physical W2 is sent annually by an employer, an employee will receive three different copies, including one that must be sent to the IRS with the employee’s federal tax return. If a taxpayer sends in their W-2 without properly attaching it to their tax return, it can lead to delays or penalties due to this simple misstep.
In this article, we’ll explain how to attach a W-2 form to your tax return to ensure quick processing and explore the potential advantages of switching to digital W-2s for employers to improve tax preparation and employee experience.
If you receive physical/mailed copies of your W-2 from your employer, it’s important to know which copy you should submit to the IRS with your personal tax return. Fortunately, each of the three copies of the W-2 should clearly indicate whether they are intended for your state tax return, federal tax return, or personal records. They all contain the same information regarding name, SSN, address, overall compensation and taxes withheld, so if you inadvertently send a state tax W-2 for federal taxes (or vice versa), this alone should not cause a delay, as long as the form is properly attached and the rest of the return is accurate and complete.
Unfortunately, the IRS offers limited guidance on how to attach a W-2 to an individual federal tax return or Form 1040. The primary goal of attaching the W2 is to ensure that the document is not separated from the overall return at any point in the IRS’ review process.
In terms of options for attaching a W2, taxpayers can use staples, paper clips or other fasteners to attach their W2 to the overall tax return, but we recommend avoiding tape or adhesives like glue, which can create issues with scanning or processing.
If a taxpayer uses a staple to attach their W-2, we recommend the following approach: Attach your W-2 only to the front page of your tax return by stapling the W-2 to the center of page one of the overall return. This allows any IRS employee who reviews the overall return to immediately see where the W-2 is located and quickly process your key information (name, SSN, address) without having to physically remove your W-2.
The same logic applies if you choose to use a paper clip to attach your W-2, in which case you should only clip the W-2 to the first page of your overall return to decrease the likelihood of the W-2 separating from the rest of the return at any stage in the review process.
If a taxpayer is using a tax professional to file their tax return electronically, the tax professional may require the taxpayer to provide an electronic copy of their W2 form. In this case, the taxpayer can usually obtain a digital copy of their W2 from their employer or payroll provider and then provide the digital copy to their tax professional.
From an employer’s perspective, there are a number of clear advantages to offering digital W2s and other digital tax forms to employees to simplify personal digital filing and to improve collaboration with tax professionals or payroll providers who can support business operations and HR or HCM management.
Explore our related blog on the benefits of integrated payroll and HR software to learn more.
Looking for reliable and efficient payroll services for your business? Our team of experts can provide guidance on tax-related topics and help ensure that your payroll processes are accurate and compliant with the latest regulations. We offer a comprehensive payroll solution that includes an employee self-service portal, automated calculations & payments, and full integration with benefits administration, time & attendance, and other HR systems.
Ready to streamline payroll and tax filing for your business and employees? Contact us today to start the process.