IRS Releases Draft W-2 Form for 2011; Announces Relief for Employers

According to a new press release, the IRS posted a draft Form W-2 for 2011, to help employers and employees confused about looming changes related to health care reform. Employers use the form to report wages and employee tax withholding.

The IRS also announced that it will defer the new requirement for employers to report the cost of coverage under an employer-sponsored group health plan, making that reporting by employers optional in 2011.

The draft Form W-2 includes the codes that employers may use to report the cost of coverage under an employer-sponsored group health plan. The Treasury Department and the IRS have determined that this relief is necessary to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with the new reporting requirement. The IRS will be publishing guidance on the new requirement later this year.

Although reporting the cost of coverage will be optional with respect to 2011, the IRS continues to stress that the amounts reportable are not taxable. Included in the Affordable Care Act passed by Congress in March, the new reporting requirement is intended to be informational only, and to provide employees with greater transparency into overall health care costs.

Questions for the Tax Lady: February 1st, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: How do I calculate my home office deduction?

The home office deduction is actually pretty simple to calculate. First find out the exact square footage of the room, then divide it by your home’s total square footage to determine what percent of your home is dedicated to your office. You can then deduct that percentage of your rent, and utility bills on your tax return. However, keep in mind that the IRS has very strict rules related to the home office deduction. For more information, check out this entry at the RDTC Tax Help Blog.

Question #2: What should I do if I still have not received a W-2 from my employer.

For now, I would say just wait. However, if you do not get your W-2 within a week or so then I would suggest contacting your employer to verify it has been mailed. If you have difficulty reaching your employer then you can contact the IRS (1-800-829-1040) for assistance.

However, before calling the IRS you should make sure to have the following information readily available:

• Your name, address, and social security number.
• An estimated of the wages you earned last year.
• The amount of federal taxes withheld from your wages.
• The dates you began (and possible ended) employment.

Help With W2 Forms

Associated Content has added an article with a detailed breakdown of the information on W2 forms. Included is a box by box breakdown of what appears in every box on W2 forms and how it pertains to individual taxpayers. You can read the full article here.

The Government to Require E-filing for Small Businesses

In the next few months many small and medium sized businesses will be required to e-file their tax returns and other tax forms including W-2s and 1099s. According to the Internal Revenue Service, corporations with $10 million or more in total assets and those that file 250 or more returns, which includes the annual tax forms given to employees and independent contractors, will be required to submit their forms for 2006 using the government’s e-filing system. Although there is no official word, it is presumed that the IRS will push more companies towards e-filing in the future. For more information click here.