Difference Between W-2 and W-4 (With Table)

W-2 and W-4 are both different kinds of forms and have different criteria on which these forms are made. W-2 is those forms that are filled by the employees. These forms indicate how much money is paid to the employees, and tax is to be withheld. W-4 lets the employers calculate their tax.

W-2 vs W-4

The difference between W-2 and W-4 is W-2 forms are normally called wage and tax statements, but W-4 is normally called employees withholding certificates. The tax which is to be withheld from the employees is indicated in the W-4 forms, but the report of their gross pay and taxes with detailed information is shown in W-2 forms.

W-2 forms indicate the report of the detailed information with their gross pay and taxes. This is an output document. This document is filled by the employer every year. This document reflects the previous year’s details too. These forms are submitted to a higher organization which is Social Security Administration. This is a wage and tax statement.

W-4 is an input document. This is filled when the employee is completing their onboard process. This document indicates the tax which will be withheld from the employee’s paycheck. These forms are not submitted to the higher organization. These forms are submitted by the employees. This is not done yearly, just during the onboarding process.

Comparison Table Between W-2 and W-4

Parameters of ComparisonW-2W-4
RequirementOutput detailsInput details
IndicatesGross pay and taxTax withhold
Filled byEmployerEmployee
Submitted toSocial Security AdministrationNone
FrequencyYearlyOnboarding paperwork
Other namesWage and tax statementEmployee withholding certificate

What is W-2?

W-2 forms are made for the employers who give the details about the financial capital given to the employees under him. This is done yearly to keep track of the financial information. This report mentions not only the salary given to the employees but also the bonus, pension, and all other taxes.

Medicare taxes are also shown in this report. This is also known as an output document as it shows the whole report. These forms are submitted to the Social Security Administration. The verification is done all the matter. These forms are also denoted as wage and tax statements.

This report also indicates the income tax withheld by the employee. Income tax depends on the salary of the employee what the employee receives in a year. This report is also shown to the employee so that the employee gets full detailed information about the salary and taxes the employee has to pay.

The tax payment can reduce after the employee fills deduction or any tax credit. These forms help to file the state taxes and the federal taxes. This report gets updated yearly as it is done by the year-end. This regulates the association to keep track of the taxes and details about the employee.

What is W-4?

These forms are filled by the employee. The employee has to fill in all the details correctly so that the employer gets to know how much tax has to be taken from the employee’s salary. This information later goes to the payroll department so that they can see all the information. The department gets to know the amount for taxes that has to be deducted.

This is an internal service tax form. It elaborates on the tax situation of all the employees. This form is filled by every employee on their first day of itself so that the employer gets to know about the details about their salary, and following that, the employer will cut the tax from their salary.

The form helps the employer to know about their details financially. The employee has to mention all their withholding finances. Employees can later change their details to update the employer. The employee can fill the form again if their financial situation changes.

The form aims for the employee to mention their dependents. This form is also known as the Employees withholding certificate. The new model of the form has eliminated to claim of personal allowances. The withhold can decrease if the employee has claimed more allowances.

Main Differences Between W-2 and W-4

  1. W-2 needs output for the document, but W-4 needs input for the document.
  2. W-4 indicates the tax withholding, but W-2 is a report of their gross pay and tax.
  3. W-2 is filled by the employer, but W-4 is filled by the employee.
  4. W-2 is filled yearly by an employer for each employee of the organization, but W-4 is filled as the onboarding paperwork.
  5. W-2 forms are submitted to Social Security Administration, but W-4 forms are not submitted to this administration.
  6. W-4 forms are also known as employee withholding certificates, but W-2 forms are known as wage and tax statements.

Conclusion

The verification is done all the matter. These forms are also denoted as wage and tax statements. W-2 forms are submitted to Social Security Administration. This report gets updated yearly as it is done by the year-end. This is done yearly to keep track of the financial information.

This report mentions not only the salary given to the employees but also the bonus, pension, and all other taxes. This report also indicates the income tax withheld by the employee. This report is also shown to the employee so that the employee gets full detailed information about the salary and taxes the employee has to pay.

This information later goes to the payroll department so that they can see all the information. W-4 forms are not submitted to this administration. The employee has to fill in all the details correctly so that the employer gets to know how much tax has to be taken from the employee’s salary.

The new model of the form has eliminated to claim of personal allowances. The withhold can decrease if the employee has claimed more allowances. The form helps the employer to know about their details financially. The employee has to mention all their withholding finances.

References

  1. https://surface.syr.edu/cgi/viewcontent.cgi?article=1002&context=scis_news
  2. https://heinonline.org/hol-cgi-bin/get_pdf.cgi?handle=hein.journals/siulj16&section=44
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