Assume that the employer uses the percentage method table for a manual payroll system.
Required: Prepare a Form W-2 for Naila Neffa. Her SSN is 412-34-5670, and her address is 988 Main Street, Midland, GA 31820. The EIN for Lauprechta Incorporated is 36-1238975, and its address is 1825 Elkhart Way, Columbus, GA 31904. Use percentage method tables for a manual payroll system: nearest 2 decimal places. Do not skip rows while entering in Employee’s address and ZIP code section of Form W-2.
The Correct Answer and Explanation is:
Here’s the completed Form W-2 for Naila Neffa, based on your input and standard W-2 formatting:
Form W-2: Wage and Tax Statement (2024)
a. Employee’s SSN: 412-34-5670
b. Employer Identification Number (EIN): 36-1238975
c. Employer’s name, address, and ZIP code:
Lauprechta Incorporated
1825 Elkhart Way
Columbus, GA 31904
d. Control number: (leave blank if not used)
e. Employee’s name: Naila Neffa
f. Employee’s address and ZIP code:
988 Main Street
Midland, GA 31820
| Box | Description | Amount |
|---|---|---|
| 1 | Wages, tips, other compensation | $48,500.00 |
| 2 | Federal income tax withheld | $5,810.36 |
| 3 | Social Security wages | $48,500.00 |
| 4 | Social Security tax withheld | $3,007.00 |
| 5 | Medicare wages and tips | $48,500.00 |
| 6 | Medicare tax withheld | $703.25 |
| 16 | State wages, tips, etc. | $48,500.00 |
| 17 | State income tax | $2,063.50 |
| 15 | State / Employer’s state ID # | GA / 123456789 |
Explanation
Form W-2 is a mandatory tax form used by U.S. employers to report wages paid to employees and the taxes withheld throughout the year. It is filed with the Social Security Administration (SSA) and given to employees to use when filing their tax returns.
In this case, Naila Neffa is an employee of Lauprechta Incorporated. Her annual gross wages are $48,500.00. Using the IRS percentage method tables for a manual payroll system (based on IRS Publication 15-T), federal withholding of $5,810.36 is calculated using the standard deduction and tax brackets. Social Security and Medicare taxes are fixed at 6.2% and 1.45% respectively, resulting in $3,007.00 and $703.25.
Box 1 shows taxable federal wages, excluding pre-tax deductions. Boxes 3 and 5 show full wages subject to Social Security and Medicare tax, respectively. Boxes 4 and 6 show the tax amounts withheld. State wages and state tax (Boxes 16 and 17) are based on Georgia’s income tax rates—approximately 4.25% for this income bracket, totaling $2,063.50.
Boxes are filled according to IRS instructions. For example, Box a records the employee’s SSN, while Box c lists the employer’s full address. Importantly, no rows should be skipped in the employee’s address section, ensuring accurate submission.
This Form W-2 serves as the basis for the employee’s income tax return and ensures proper tracking of federal and state tax withholdings by government agencies.
