Compare W2 vs W4: Which form do you need?

Irmak Kocyildiz

Irmak Kocyildiz

12 min read

2021-04-14T

Compare W2 vs W4: Which form do you need?

If you are an employer, you must fill in different types of forms within a tax year. Even if you are an employee, you can find different types of forms in your mailbox during a tax year. The W-2 form is important for employers. Employers must file a W-2 form to notify their employees of wages and tax deductions paid within a tax year. There are also forms that employees must fill in. Employees must complete the W-4 form and give it to their employer. W-2 form is a form that states the wage and tax statement, as can be understood from the legal name of the form. In this article, we will talk about the W-2 and W-4 forms in detail. We will mention the differences between the W-2 and W-4 Forms. Let’s look at these issues together in detail.

What is Form W-2?

If you are an employer in the USA, you have to fill out some forms for your employees and file them. The legal name for the W-2 form is the wage and tax statement. Employers must complete a Form W-2 if they have paid their employees $ 600 or more in a tax year. The W-2 Form is an official document that enables employers to notify the IRS of wages, salaries, and tax deductions paid to their employees within a tax year. This form allows the employer to notify the IRS of any tax deductions made to the employee, other than wage payments. In other words, it also reports the employer’s deductions from the employee’s salary, income tax cuts, social security tax cuts, Medicare tax cuts. Employers must fill in Form W-2. You can access the W-2 Form on the IRS official website.

What is Form W-4?

We briefly talked about Form W-2. So what is Form W-4? As can be understood from its legal name, Form W-4 is an employee’s withholding certificate. Employees must fill in Form W-4. If you are an employee, you must complete this form when you start a new job and give it to your employer. This form is necessary so that your employer can withhold the correct amount of federal income tax from his pay. If there is a little deduction made by the employer, you may be in tax debt or need to pay fines. You will also get a refund if there are too many deductions. Therefore, it is important that employees fill out this form in order to get the correct deduction from your salary. With the W-4 form, you provide information about your marital status, the number of dependents, and whether you have a second job. Employees must complete a new Form W-4 when they enter a new job and give it to their employer. In addition, employees may need to complete a new Form W-4 whenever there is a change in their personal or financial situation. If you are an employee, you inform the employer how much federal income deduction will be deducted from your salary with Form W-4. The employer also files a Form W-2 to report this amount withdrawn. You can access the W-4 form on the IRS official website.

In short, employees fill out the W-4 form and it is a form used to report how much federal income tax will be deducted from your salary. The W-2 form is filled by employers and informs its employees about the wages and taxes paid.

Who Should Fill the W-2 Form?

The employer must file the W-2 Form. Employers fill out many forms within a tax year. With Form W-2, one of the forms that the employer has to fill out, the wage and tax deductions paid to the employee are reported. Employers are required to submit Form W-2 to notify their employees of salary and tax deductions paid $ 600 or more in a tax year.

So what form should be filled in for independent contractors? For independent contractors, the form you should submit is different. If you have paid independent contractors $ 600 or more in a tax year, you must complete Form 1099-NEC. The aim is to record and report income. You must file Form 1099 by 31 January. This means employers must file Form 1099-NEC for independent contractors or self-employed persons. This difference is important. You should know the difference between independent contractors and employees. In short, Employers file employees’ wage and salary information with Form W-2.

Who Should Fill the W-4 Form?

W-4 Form should be filled out when an employee starts a new job and handed over to his employer. It is the employee’s withholding certificate. The employer will file this form. Employees fill out the W-4 form. Employers fill out the W-2 form. This distinction should not be forgotten.

When Should Forms be Filled?

Employers must send Form W-2 by 31 January at the latest. For example, you have to file the wage and tax deductions you paid to your employee in 2020 to SSA with Form W-2 until January 31, 2021, at the latest. You should also send your employees the W-2 form by 31 January. If you are an employee and received $ 600 or more in the tax year, you must receive a W-2 form from your employer by January 31st.

When employees start a new job, they must fill in Form W-4 and submit it to their employer. Also, in case of a situation affecting your tax situation, you must fill in and submit a new Form W-4. Situations that affect your tax situation may be your marriage, divorce or having children. In short, you must fill out the W-4 form and give it to your employer. The employer files it.

How to Fill W-2 Form?

If you are an employer and have paid your employees $ 600 or more and withheld tax during a tax year, you must file Form W-2 with Copy A to SSA by January 31st. You can file the forms electronically or by post. Usually, SSA encourages filing electronically. Filing electronically may be faster and easier for you. Also, if you are filing 250 or more Form W-2, you must file it electronically.

You need to send A copy of the W-2 form to the Social Security Administration (SSA). If you want to send it electronically, you can send it from the website of the Social Security Administration. For this, you must first register with  Business Services Online on the website of the Social Security Administration. Here you can quickly e-file your form. You can also access Form W-2 on the IRS official website.

If you do not wish to file the W-2 form electronically, you can send it by post. You can get the W-2 form from where you purchased the forms. If you want to file the W-2 form on paper, you can send the “A” copy of the form to the Social Security Administration at the address below.

Social Security Administration

Direct Operations Center

Wilkes-Barre, PA 18769-0001

 

When you examine the IRS W-2 form, you will see that it has several copies. You must send a copy of Form W-2 to the Social Security Administration with Form W-3. The W-3 form provides an overview of the W-2 form. It is the sum of the data on Form W-2.

You must complete Form W-2 Copy 1 for your state, city or local tax office.

W-2 Form Copy B is filed with the employee’s federal tax return. This information is given to the Internal Revenue Administration.

W-2 Form Copy C is for employee records.

W-2 Form Copy 2 will be filed with the employee’s state, city, or local income tax return.

W-2 Form Copy D is for employers. You must keep the D copy together with the copy of the W-3 form in your records for 4 years.

Filing electronically may provide convenience to the employer. In short, if you are an employer, file A copy of Form W-2 to SSA electronically or by mail by January 31st. Give out Form W-2 “copy B”, “copy C”, and “copy 2” copies to employees by 31 January.

How to Fill the W-2 Form?

Employers must complete the W-2 form. The form is available on the IRS website. There are boxes on Copy A of Form W-2 that you have to fill in. There are boxes from a to f and boxes from 1 to 20 you need to fill. Let’s briefly talk about what these boxes mean.

Box a: Employee social security number

Box b: Employer’s EIN

Box c: Employer name, address and ZIP code

Box d: control number

Box e: Employee name, surname

Box f: Employee address and ZIP code

 

Box 1: The box detailing your fees, tips and other compensation payments.

Box 2: You report the federal income tax deductions you pay.

Box 3: Shows the social security fees.

Box 4: Shows the social security tax deductions you paid.

Box 5: Medicare shows wages and tips.

Box 6: Shows the Medicare tax deductions you have paid.

Box 7: Shows social security tips.

Box 8: Displays other allocated tips.

Box 10: Shows dependent care benefits

Box 11: Unqualified plans

Box 15: In this box, the employer must enter the state ID number.

Box 16-19: In these boxes, state salaries, tips, how much state income tax is deducted from the salary, local wages, tips, and the amount of local income tax deducted from the salary are shown.

How to Fill the W-4 Form?

The W-4 form is available on the IRS official website. It is important to fill in the W-4 form correctly. The information on this form allows the employer to deduct accurate federal income tax from your salary. Form is a form consisting of 5 stages. As an employee, there are 5 sections on Form W-4 that you must complete. Which sections you need to complete depends on whether you are married or single or have children.

Section 1: You fill in your personal information. You must fill in your name, surname, address, state, ZIP code, SSN number, and filing status.

Section 2: If you have more than one job or your spouse also works, you must complete this section.

Section 3: You should complete this section if you have dependents or children.

Section 4: This step is optional. Notifies other regulations. In this step, you can enter other income such as retirement, deductions, additional stoppages.

Section 5: It is the last step. You sign and complete the form.

W-2c Form for Corrections

The W-2c form is the form used to report the corrected wages and tax statement. If you make any mistakes in the form, you must file Form W-2c to correct it. When you file the W-2c form, you must also file the W-3c form. You can e-file it using the Social Security Administration’s Business Services Online. This is a faster and easier method for employers. Remember to file the W-3c form every time you complete a W-2c correction form.

Bottom Line

W-2 Form is a form that must be filed by employers for each tax year. If you have paid your employees $ 600 or more in a year for the services they provide, you must complete and submit Form W-2 to report this. You must send a copy of Form W-2 to SSA. You can e-file electronically if you wish. If you want, you can send it in paper form by mail. E-filing can be more advantageous for you, faster. In addition, with the W-2 form, you can report any tax deductions you have made from your employee’s paycheck. The Social Security Administration encourages filing online. Remember, if you are filing 250 or more Form W-2, you have to do it electronically. There is an issue to be aware of. If you have paid the independent contractor or self-employed $ 600 or more in a tax year, you must file a Form 1099-NEC. Remember this difference.

Employees fill out Form W-4. When they start a new job, they must complete this form and give it to their employer. Additionally, you must fill in a new Form W-4 when there are changes that affect your tax status. Examples of these situations include having a second job, getting married, getting a divorce, or having a new child. The purpose of employees completing Form W-4 is to inform the employer of how much federal income tax should be deducted from their salary. The employer calculates and makes deductions according to the information in this form. That is, the employer informs the employee how much he has paid and tax deductions with the W-2 form.

*This document should not be assumed as a legal advice. These informations may always change, please contact with our team of attorneys to confirm.

References

https://www.irs.gov/pub/irs-pdf/iw2w3.pdf

https://www.irs.gov/pub/irs-pdf/iw2w3.pdf

https://www.irs.gov/pub/irs-pdf/fw2.pdf

https://www.ssa.gov/employer/paperFormInstr.htm

Irmak Kocyildiz
Written by Irmak Kocyildiz

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