Update on Entering # of W2s
We have gotten several emails and comments regarding our last post on entering the number of W2s filed when preparing business returns. Here is an update regarding that post:
- The information is not required to be inputted into the actual tax return. This is for internal IRS security only. Therefore, you will be inputting the number of Form W2s into a box on your tax processing software related to E Filing / Internal Security. We happen to use Pro System FX and here is a link to a video from their website regarding how this process is done for those returns (your software will be different, but it is likely that all software will have similar processes).
- This information is required when you show wage deductions on the front page of the related tax form (1120, 1120S, 1065). However, it appears that if you file a Schedule F with your business return, it may not ask for this information (that may change during tax season).
If you know that you have tax returns that will show a wage deduction on the front page of the return, it would be good to ask for the number of W2s processed by the company up front. Otherwise, you may be scrambling at the wrong time to get the return timely filed (i.e. trying to e file a return on the actual due date).
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
What is the original source for the requirement? Our software company has input areas for the w-2 info, etc., but I have been unable to find any notice or procedure or even a press statement from the IRS. I have checked their e-file information as well as the identity theft information.