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What You Must Know About IRS Form W-3

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Core Group
What You Must Know About IRS Form W-3

As a business owner, being well versed in IRS tax forms and the best ways to record payroll and submit taxes is a crucial skill. IRS forms and adhering to proper FICA (Federal Insurance Contributions Act) standards can be confusing. The IRS does little to illuminate this process, and there is not a lot of simple, concise advice for dealing with taxes. 

So, we are going to walk you through one particular IRS form, Form W-3.

What is Form W-3?

IRS Form W-3 is the Transmittal of Wax and Tax Statements form used by the IRS and Social Security Administration (SSA) that is a summary and transmittance of all of the W-2 forms of a business. 

Several important Form W-3 details are:

  • Reports total employee wages and tax withholdings (both income and FICA tax)
  • Details payroll amount subject to Social Security and Medicare tax
  • Filed annually
  • Required of most employers located in the U.S

The SSA and IRS use this information to monitor salaries, commissions, wages, cash tips and any other forms of compensation an employee receives.

Form W-3 also reports total income and FICA taxes withheld from the paycheck of employees. 

Who Needs to File a W-3 Form?

Every business that files one or more W-2 forms is required to file Form W-3. Organizations that withheld income, Social Security or Medicare taxes from paychecks or paid more than $600 in wage and did not withhold any earnings are required to file Form W-3.

What is Included in a W-3 Form?

Form W-3 requires employer identification number (EIN), business address and contact information. The form also details total wages, including salary, commission, tips and any other compensation paid to employees over the taxable year. 

The form also requires declaring taxable wages. Business owners must also provide tax withholdings, including federal and state tax withholdings; and Social Security and Medicare tax withholdings. 

Deadline and How To File

Filing Form W-3 to the SSA must be completed by January 31. Employees do not need Form W-3, but they must receive paper copies of the Form W-2 before January 31. 

Employers filing more than 100 W-2s must file online using e-file through the Business Services Online (BSO) portal. Employers filing less than 100 W-2s can mail in a Form W-3, submit it through their accountant or any combination of the list options. Employers submitting less than 50 W-2s have their W-3 information automatically filled out by the BSO. 

Contact Us For More Information

Filing Form W-3 every year is a simple but time-consuming process, especially when filing hundreds of W-2s. We clarify and streamline this process with our innovative and original tax strategies. Give us a call at 866-434-4576 to discuss your tax opportunities today.  


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