Form W-2 2021 Changes

Form W-2 2021 Changes

Form W-2 is updated every year by the Internal Revenue Service but the overall use of it remains the same. For the 2021 tax season, the IRS will change Form W-2 but these changes won’t be anything significant. Form W-2 is still going to be used for reporting income paid to employees and taxes withheld from this income.

Over the years, many changes occurred on Form W-2 but these changes have always been in the form of structural changes on how employers filed it. With that said, don’t expect any significant changes in Form W-2 2021. All employers are going to provide the same information on Form W-2 in 2021. These will be

  • Income paid to employees
  • Federal, state, local income tax withheld
  • Social Security wages
  • Social Security tax withheld
  • Medicare wages
  • Medicare tax withheld

Although there is a lot more that goes into a Form W-2 depending on the employee’s workplace and taxes withheld, the above will always be the same.

With all this said, don’t expect any changes to Form W-2 and the way it is filled out for employees. Same as any other year, all employers have until January 31st to furnish employees with Form W-2 so they can use it to file a fedeal income tax return.

Pay Taxes With Credit Card IRS

When paying taxes online using a credit card, you will have a couple of options. The Internal Revenue Service doesn’t accept credit card payments on IRS.gov but there are approved payment processors that accept payments from credit and debit cards. You can see the full list of payment processors below.

  • Pay1040
  • PayUSAtax
  • OfficialPayments

Each of these above payment processors has its own payment processing fees ranging from $2 to 1.90% of the amount paid. You can also pay taxes with your bank account on IRS Direct Pay but it isn’t a convenient option if you want your payment to reach the IRS as soon as possible.

This is the fastest way of paying taxes online. At the time of writing, the fees for the above payment processors are as follows.

  • Pay1040
    • Credit Card: 1.96%
    • Debit Card: $2.55
  • OfficialPayments
    • Credit Card: 1.99%
    • Debit Card: $2.00 for payments under $1,000, $3.95 for payments over $1,000
  • PayUSAtax
    • Credit Card: 1.96%
    • Debit Card: $2.55

All three of these payment processors accept all kinds of payments from VISA, Master Card, Discover, and American Express to Amex Express Checkout to NYCE to Pulse and more. See the full list of accepted payments on IRS.gov.

Keep in mind that it may a few hours for your payment to be processed. Once you’re done paying, make sure to keep the confirmation number as you will use it to track the status of your payment.

On the other hand, you can use the IRS Direct Pay to make payments using a bank account. This will also allow you to pay taxes quickly but the amount of time it takes for your payment to be processed is significantly longer. This is due to how payment is made. On average though, payments made on Direct Pay take about two business days to be processed.

However, if you place your payment after 9 PM or on a Sunday, your payment will begin processing the next business day so depending on when you make your payment, it may take up to 3 business days.

The IRS Direct Pay is best for those who are going to make large tax payments but for that, the IRS recommends using the Electronic Federal Tax Payment System (EFTPS). To pay taxes on EFTPS, you must enroll and create an account. The EFTPS is also best for business.

Where is My Stimulus Check - IRS Get My Payment

The Internal Revenue Service started handing out stimulus payments months ago but there are still people who haven’t received their stimulus checks. If you’re one of them, the only way to check the status of your stimulus payment is through the IRS Get My Payment. If you’ve tracked the status of your tax refund in the past, you can use the IRS Get My Payment to see the current status of your payment.

This tool is easy to use and the only reliable way to check your stimulus payment. This tool can be used for both the first and the second stimulus payments that are on the way.

Before we get to how to track the status of a stimulus payment, make sure that you’re eligible for one. The income threshold will be determined based on your 2019 tax return. If you haven’t filed one yet, your 2018 tax return will be used to determine eligibility.

Those who are single, the phaseout begins at $75,000. For joint filers, this is $150,000. The stimulus payments completely phase out if the income is more than $99,000 for singles or $198,000 for joint filers. The “income” here refers to the adjusted gross income which is not your actual income but the income you are taxed.

As long as you’re eligible, you will get your stimulus payment sooner or later. Here is how you can check the status of your stimulus payment.

Go to IRS Get My Payment.

Click on Get My Payment and fill out the verification form which includes Social Security Number or Individual Tax Identification Number, Date of Birth, ZIP code, and Date of Birth. Then, click on CONTINUE and you will see the current status of your tax return.

If you will receive your stimulus payment in the form of a check, you will receive a debit card, not an actual check. This is for those who don’t have their bank account information on the IRS. This can happen if you’ve never detailed your bank account information to the IRS and received tax refunds as a check or never filed a tax return.

Want your stimulus payment to be sent to your bank account? Contact the IRS. However, if the stimulus payment is already sent, it is too late and you will have to withdraw money from the debit card you’re given.

Tax Filing Deadline Moved to July 15

The Internal Revenue Service has moved the tax filing and tax payment deadline to July 15. This is for easing the financial burden of the taxpayers caused by the coronavirus crisis. With the tax filing deadline postponed, taxpayers have three months in extra to file their tax returns. For this to take effect, taxpayers don’t need to file an extension.

The tax filing and payment deadline is postponed by the IRS automatically. So no need for filing extra tax forms even if you haven’t filed taxes after April 15.

Tax Extension for 2019 Tax Returns

If you can’t gather your tax documents to file a tax return by July 15, you can still file a tax extension. This will push the tax filing deadline only three months though, not six months. With that said, filing for an extension before July 15 will give you time until October 15. Normally, a tax extension would grant taxpayers six months but since the IRS already postponed the tax filing deadline, you will get an extra three months.

However, you still must pay taxes before July 15. For this, you can pay taxes if you think you will owe when filing a tax return when submitting your tax extension form or pay on IRS Direct Pay.

We suggest paying taxes and filing a tax extension at the same time on IRS Direct Pay as you will finish two things at once. One thing to keep in mind about IRS Direct Pay though, you can only pay taxes with a bank account. Direct Pay currently doesn’t accept other forms of payments such as credit cards and debit cards. Learn more about paying taxes online from our homepage.

Taxes Withheld on Wage and Tax Statement

Wage and Tax Statement, Form W-2 reports income, Social Security, and Medicare taxes withheld from the employee’s salary. It also reports wage, salary, and other compensation paid to the employee. The employee will then use Form W-2 to file a federal income tax return.

Because of this, employees count on their W-2 to file a tax return. With that said, employers must file and furnish employees with their Wage and Tax Statement until January 31st. If filed late, the employer will be subject to a $50 initial penalty for the first 30 days. After the 30 days to August 1st, the penalty will be $100 per W-2 filed late.

Even before filing a tax return, all the information regards to the employee’s income and tax can be seen on Form W-2. This gives an initial idea to the employee whether he or she is going to receive a tax refund or not. Along with the federal income tax withheld, the employee will be able to know the amount of Social Security and Medicare tax withheld.

On Form W-2, you can see the taxes withheld on the following boxes.

Box 2: Federal income tax withheld

Box 4: Social Security tax withheld

Box 6: Medicare tax withheld

Box 17: State income tax withheld

Box 19: Local income tax withheld

What is taxes withheld?

The federal law requires employees to pay for their federal income tax gradually during the course of the tax year. The employer takes a portion of the employee’s salary and forwards it to the IRS. This is how employees pay for their federal income tax or at least a part of it. This is known as the tax withholding.

If the taxes withheld throughout the tax year is more than what the employee owes, the IRS will send a tax refund. This is the sole reason why we have such a thing as tax refunds. Use Form W-4 to let your employer know how much tax needs to be withheld from your salary.

Deadline to File 1099-MISC

Form 1099-MISC is used for reporting miscellaneous income paid non-employees such as contractors. If you hired a contractor to do some work for you in your business, you are required to furnish them with a Form 1099-MISC—the same way as furnishing employees with Form W-2, Wage and Tax Statement.

Both Forms 1099 and W-2 report income. Since the individuals you’re going to furnish these tax forms rely on them to file their federal income tax returns, you should sort them out before the tax season starts. But you will have a few extra days. While the tax season starts on January 27th, you have until January 31st to file Form 1099-MISC. This deadline also applies to Form W-2.

Penalty for Late Filing

If Form 1099-MISC isn’t filed before January 31st, you will be subject to a $50 penalty for the first 30 days you did not file. If you file Form 1099-MISC after March 1st or 30 days after January 31st, the penalty will remain the same. If filed after 30 days—between August 1st and March 1st in most years—the penalty will be $100 per missing Form 1099-MISC.

The bottom line here is the deadline to file Form 1099-MISC is January 31st. If filed within 30 days after January 31st, the penalty for late filing is $50 per violation. If filed after the 30 days has passed until August 1st, the penalty will be $100.

Those who don’t fill out Form 1099-MISC and issues it to the recipient will be subject to different kinds of penalties. The Internal Revenue Service will review your situation and if nothing is found that holds you back from filing these tax forms, the penalties will be much severe. We suggest filing Forms 1099-MISC early on if you have all the information you need. Need the contractor’s taxpayer identification number to file Form 1099-MISC? Request them to fill out Form W-9, Request for Taxpayer Identification Number.

Tax Withholding Tables

The tax withholding tables are used by employers to figure out how much tax needs to be withheld from the employee’s pay. The federal law requires all employers to withhold tax from employees’ salary. Since it is mandatory for everyone to pay federal income taxes during the course of the tax year, employees have no other choice but to withhold tax.

As for how the federal tax withholding is determined, the employer will use the employee’s Form W-4 and put it side by side to the tax withholding tables. For the most part, the filing status, pay frequency, employee’s salary, and the information provided on Form W-4 will determine the amount. Also, you can take a look at the previous tax year’s tax brackets to get an estimate of how much the employee is likely to owe to the IRS when a tax return is filed.

How to get the tax withholding tables?

The Internal Revenue Service releases all the documents and instructions regards to tax withholding with Publication 15-T. This not only includes the tax withholding tables but the following as well.

  • Percentage Method Tables for Automated Payroll Systems
  • Wage Bracket Method Tables for Manual
    Payroll Systems With Forms W-4 From
    2020 or later
  • Wage Bracket Method Tables for Manual
    Payroll Systems With Forms W-4 From
    2019 or earlier
  • Percentage Method Tables for Manual
    Payroll Systems With Forms W-4 From
    2020 or later
  • Percentage Method Tables for Manual
    Payroll Systems With Forms W-4 From
    2019 or earlier
  • Alternative Methods for Figuring
    Withholding
  • Tables for Withholding on Distributions of
    Indian Gaming Profits to Tribal Members

All and all, these give enough information and resources to the employers to withhold the right amount of tax. There is also a huge part of Form W-4. If Form W-4 is not filed accurately, more or less tax than needed may be withheld. This eventually affects the employee’s tax refund or the employee may not even get a tax refund at all.

1099 vs. W-2

Form W-2 and Forms 1099 are used to report income. The only thing that differentiates the two is the type of income being reported. While Form W-2 reports wage, salary and other compensation paid to employees by an employer, Form 1099 reports all other types of income.

There are more than just one type of Form 1099 and its use goes beyond just the employer and the employee. Assume you hired a freelancer or a contractor to do some work for your business. If the payments made to that contractor is more than $600, you will file a Form 1099-MISC and furnish it to the contractor the same way you do it for your employees. Except for this time with Form 1099-MISC, not W-2.

Other than this, there are many cases where Form 1099 is used. The most commonly, Forms 1099 is used in reporting withdrawals from a retirement account, government payments, interest payments, and other distributions. It can also report canceled debt. Since the cancellation of debt is considered as taxable income, you will use Form 1099 to file taxes.

The bottom line here is both Form W-2 and Form 1099 is used to report income. The only difference is the type of income reported. While Form W-2 doesn’t go beyond the employer and the employee, Form 1099 can be used to report any other income paid to an individual or an entity.

This depends on which Form 1099 is filed but it is usually used by businesses and corporations. Learn more about W-2 from our front page and how to file it as an employer or how to file taxes as an employee when your employer furnishes a W-2.

Where to find AGI?

The adjusted gross income or AGI for short refers to the taxable portion of your income. In every case, your AGI will be different than your income reported on Form W-2. So you cannot find AGI on Forms W-2. To find your AGI, you need to calculate your AGI. Therefore, you won’t find AGI on any of the tax forms that is issued to you.

The one and the only way to find AGI is to calculate AGI using Form 1040. As for how to calculate AGI, it’s easy. You will claim the deductions that are available to you but before you get to that, you must decide whether to itemize or take the standard deduction.

Although it isn’t obvious at first glance, it is an easy decision to make. If your itemized deductions aren’t more than the standard deduction amount, take the standard deduction. Once that is all set and done, you can make adjustments to your taxable income which will reduce it further down. There are plenty of adjustments you can make to your tax deduction but the highlights include educator expenses, moving expenses for military service members, and student loan interests paid.

By gradually taking these steps, you will get to your AGI. You can see it on Line 8b of Form 1040. Looking for prior year’s AGI? More on that below.

AGI on Previous Years’ Tax Returns

If you did not file your tax return and hired a tax professional and trying to find adjusted gross income for previous tax years, request a transcript from the IRS. This is not your original tax return but will include the necessary information, in this case, your AGI.

This can easily be done online by using the IRS Get Transcript tool. To get your transcript, you don’t need much other than your personal information. You will be using the following to verify your identity.

  • Social Security Number
  • Date of Birth
  • Filing Status
  • Mailing address on the latest tax return
  • Personal Account Number
  • Phone number with your name on the account

Click here to use IRS Get Transcript to view old tax returns. Keep in mind that you won’t see all of your previous tax returns. Only the ones that are available online will be shown. This usually includes the tax returns that are filed electronically. If you can’t find the transcript you’re looking for, contact the IRS by dialing 1-800-908-9946.

Wage and Tax Statement Form for Multiple Employees

The Internal Revenue Service mandates employees to file a Form W-2 to report wages paid to employees. Regardless of the business, you’re operating or the size of the business, you as an employer must file a W-2, Wage and Tax Statement Form for every employee that is working for you.

You can file Forms W-2 on paper or electronically but if you need to complete more than 250 of them, you must file electronically. While this is an IRS tax document, Form W-2 cannot be filed on the IRS website. Instead, you must use Social Security’s Business Services Online. For more information on how to file multiple Forms W-2 for employees electronically and the use of the Business Services Online, read this article.

Content of Form W-2

The Wage and Tax Statement Form includes everything your employees need to file their federal income tax returns. It shows the wage, salary, and other compensation as part of their employment paid to them along with the federal taxes withheld. Here is every box that you will need to fill out on Form W-2.

  • Wage, salary and other compensation paid to the employee
  • Total amount of federal tax withheld from the employee(s)’ income
  • Social Security wages
  • Social Security tax withheld
  • Medicare wages
  • Medicare tax withheld
  • Social Security tips
  • Allocated tips
  • Dependent care benefits
  • Nonqualified plans
  • State wages and tips
  • Total amount of state tax withheld from the employee(s)’ income
  • Local income tax
  • Locality name

Each and every box is on Form W-2 needs to be checked. If there is nothing to enter on any of the boxes, leave it as it is. Depending on where you file Forms W-2 electronically, you may input 0 on the boxes that don’t concern the employee.


Scroll to Top