Duplicate Forms W-2

Sometimes, although we send all the W-2 forms at the end of the year by using the names and addresses we have in our files, these forms often get lost in the mail, the wrong person receives it (such as an ex-spouse, or a stranger if the employee has moved) and we end up by receiving requests to issue again the W-2 to the employee that claims that never got his/her W-2.

Here is a simple policy regarding on how to handle these requests:

1. Ask that all requests for a duplicate W-2 to be in writing.

2. Create a "Duplicate W-2 Request Form" and note the following information on that form:

•   Date of the request
•  Date you mailed the duplicate
•  Change of address (this will be as a support if the W-2 is returned and the employee complains)

When issuing a duplicate W-2: type "REISSUED STATEMENT" in the upper right corner of the form. It is OK to make a copy of the "Employer's Copy" and send it to the requester.

When issuing a duplicate W-2 to a former employee: make a photocopy of the envelope in a way that will show the address used, and note on that photocopy the date you mailed out the duplicate form.

Returned W-2: if any W-2 forms get returned back by USPS as undeliverable, keep the returned W-2 in the original envelope. If you hear from that employee, put the returned envelope into a new envelope and re-mail it to the correct address. If you do not hear from the employee, keep the returned W-2 in the original envelope for at least 4 years as proof that was mailed by the deadline.

Take Advantage of Purchase Discounts!

We all know that some companies offer a purchase discount when the invoice is paid within 15 or 20 days (or any other time, depending on the company)

The discount would appear under the "Payment Terms". An invoice with a payment term that has 2/15 Net 30 means that you can take 2% Off if you pay the invoice within 15 days, and you have to pay the invoice in full (Net amount) if you pay it within 30 days.

If you constantly take purchase discounts, you may actually keep a record of the discounts lost in case the invoice wasn't paid in time and you lost the discount.

The account used for recording lost discounts you can name it "Purchase Discounts Lost"

Example:

Your firm receives an invoice for $10,000 with credit terms 2/10, Net/30. 

This means that if you pay it within 10 days, you pay only $9,800 if you pay it within 30 days, you will pay the full amount of $10,000

If you pay the invoice within 10 days, you are making the following entry:

To record the receipt of the invoice WITHOUT keeping track of the discounts taken:

Purchases (Asset Account)       $9,800

        Accounts Payables (Liability Account)     $9,800

To record the receipt of invoice WITH keeping tracking of the discounts taken:

Purchases (Asset)         $10,000

        Accounts Payables (Liability)                                 $9,800

        Purchase Discounts Taken (Revenue Account) $200

Record the payment:

Accounts Payables     $9,800

       Cash                                $9,800

If the bill is not paid within the discount period than you are making the following Journal Entry:
 

Accounts Payables (Liability)                            $9,800

Purchase Discounts Lost (Revenue Account) $200

                   Cash                                                               $10,000

Both Accounts "Purchase Discounts Taken" and "Purchase Discounts Lost" you can make them sub-accounts of "Purchase Discounts" - a revenue (income) account.

In this case, if we follow the above example, this account will appear as follows (on the Income Statement):

Purchase Discounts

           Purchase Discounts Taken     $200

           Purchase Discounts Lost       -$200

Total Purchase Discounts                  $0

Let's say that at the end of the year you want to see how many discounts you took and how many you lost, you just take a look at the "Purchase Discounts" account:

Purchase Discounts

        Purchase Discounts Taken         $1,000

        Purchase Discounts Lost           - $300

Total Purchase Discounts                    $700