W2 vs W4 Tax Form: A Simple Breakdown of the Key Differences
Do you know the difference between W2 vs W4? When it comes to IRS tax forms, all the numbers and letters can feel more like alphabet soup than anything meaningful!
If you’re wondering about the W2 vs W4 tax form, you’re not alone—many employees get confused. Which form is used for what, and what do you need to know about each form?
Don’t fret—instead, keep reading to find a simple breakdown of the differences between each form.
What Is a W2 Form Used For?
A W2 form, also known as your Wage and Tax Document, is an important piece of paper that you’ll want to hold onto for tax time.
The W2 is a document that your employer sends each year to both yourself, as the employee, and the IRS. It contains a breakdown of how much you were paid during the year and how much tax was withheld.
It’s used by the IRS to make sure you’ve paid the correct amount of tax and it’s a document you’ll use when filing your own taxes. Even if you only worked for a company for a short amount of time, or part-time, they’ll still issue you a W2.
Or, if you’re self-employed, you can create your own W2—learn more from this website, https://www.paystubs.net/create-form-w2.
How about a W4?
In contrast, the W4 form is something that you’ll complete when you start a new job. It’s a key piece of onboarding paperwork, so make sure to take the time to understand it once you’ve been hired.
The W4 form is filled out by new employees and it’s used to determine how much tax will be withheld from your pay. This ensures you pay the right amount of tax and it helps you avoid large tax payments at the end of the year.
When completing the form, you can claim allowances, such as dependent children, which will result in paying less tax. You’ll always want to be accurate and honest when completing your W4.
Before getting started, make sure you have your social security number handy, as you’ll need it to get started.
Use These Tips to Understand the W2 vs W4 Tax Form
Hopefully, you now have a better understanding of the W2 vs W4 tax form. An easy way to remember it is that the W4 is a form you complete yourself when starting a new job, while the W2 is a form that is automatically sent to you by your employer.
If you have any questions about your tax forms, speak to your HR manager or your accountant. Tax paperwork can be confusing, and it’s important to get it right, so don’t be afraid to ask!
Use the tips above to learn more about both forms, and you’ll then be on your way to simplifying your yearly tax returns.
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