Preparing Your Tax Return(s) and Information Returns

Common Errors to Avoid

Errors Common to Paper Form W-2 Reports:

• Prior year tax form or prior year Social Security wage base maximum used.
• Unscannable reports. Reports that are not scannable by the SSA's optical equipment cost more to process and are more subject to error. See specifications in Publication 1141, General Rules and Specifications For Substitute Forms W-2 and W-3.
• Failure to file Copy A of Form W-2 with SSA.
• Using titles before and after the name, misspelled names or nicknames.

Errors Common to Magnetic Media Filers:

• Failing to file Form 6559, Transmitter Report and Summary of Magnetic Media, with each magnetic media report. Form 6559 or a copy of the form helps the SSA identify the employer (or transmitter), the type of report and the year being reported. Multi- reel filers should provide a copy of Form 6559 for each reel.
• Omitting dollar totals on reports. SSA uses dollar totals to determine if the report is in balance and, if not, to show where the error may be found and corrected.

Incorrect or missing Employer Identification Number (EIN):

• The SSA and IRS keep employer records by EIN. Reports received with the wrong EIN's may be credited to the wrong records. The IRS may assess penalties for failure to file correct reports if your EIN is either missing or incorrect.

Incorrect Employee Name or Social Security Number (SSN):

• To avoid costly errors, update your payroll records by asking employees to verify their name and SSN before you close out your books and prepare Forms W-2.

Important References:

Form 6559 Transmitter Report and Summary of Magnetic Media
Publication 1141 General Rules and Specifications For Substitute Forms W-2 and W-3

Weblink:

Employer Reporting Instructions & Information