Difference Between W2 and W4 (With Table)

The forms we deal with to pay the tax may be sound the same. But they are different in their ways. The contours will fill to pay the tax and for billing and many needs. Sometimes it depends on who fills up the documents. The W2 and W4 are IRS(internal revenue service) forms. When you are employed, or you employ some people, then you must know about these forms.

W2 Vs W4

The difference between W2 and W4 depends on who fills the form. W2 is the form that contains wages and tax deductions in that year. W4 is the form for employees to show the amount of withholding from the paycheck of the year. These forms are salient in tax payments. It helps to know about your salary and the tax you paid to the government yearly.

The W2 forms are for an employee to know about the wages and taxes filled by the employers. It is called a wage and tax statement.
The employer sends the w2 form to the employee and the IRS(Internal Revenue Service). The W2 form helps the IRS track the tax payments of individuals. An employer has to send the W2 form to the employees to who he gives salary.

The W4 form is for employees to check the withheld taxes in each paycheck every year. Employees withholding certificate is the other name of W4. It is easy for people doing the same job over the years. But difficult for people who change their work yearly. By filling the W4 form employees, inform the withhold and deductions to the employers. W4 forms filled carefully else results in difficulty while returning the files.

Comparison Table Between W2 and W4

Parameters on comparisonW2W4
DefinitionEmployer fills the W2 form to show the wages and taxes for the employees.Employees fill the W4 form to inform the taxes and deductions to the employer.
Submission timeAt the end of every year( Jan 31)Before beginning a new job
FillersOwnersEmployers
Submission to IRSYesNo
Sections25 columnsFive sections

What is W2?

The W2 form is to inform the wages and taxes to the employees by the employers. The employer is responsible for the W2 form. He is the one who sends this form to the employee and the IRS(internal revenue service). The W2 form is also called wages and tax statement. The IRS checks the tax payment history with the 1040 form.

The W2 forms are to report to the FICA(Federal insurance contributions act). The W2 form is into two sections called state and federal to pay tax on both levels. It includes the columns as personal information and professional pieces of information. After filling the W2 form, the total paychecks of employees tax reduced. The w2 has a box of a-f and 1 to 15. Each box represents different pieces of information. The column from a to f denotes your personal information.

  1. Box 1 shows the income,
  2. Box 2 shows the withheld by the employer,
  3. Box 3 shows the earnings subject to social security,
  4. Box 4 represents the withheld by social security tax,
  5. Box 5 shows the medicare tax,
  6. Box 6 shows the amount of withholding,
  7. Box 7 shows the tips,
  8. Box 8 represents the amount of withholding,
  9. Box 9 left empty to show the deduction,
  10. Box 10 shows the amount received with benefits,
  11. Box 11 shows the money get from the non-qualified plan,
  12. Box 12 shows the reductions,
  13. Box 13 is for reports,
  14. Box 14 represent an additional tax
  15. Box 15-20 for state and federal tax.

What is the W4 ?

The W4 form is to inform the taxes and deductions to the employers. It is also called an employee withholding certificate. The IRS many changes to the W4 form in 2020. So there is no need for the 1or 0 allowances from 2020. Results in the increased amount of money in the year paychecks. If you’re doing one job and don’t have any dependents, then the process is simple and easy, else you doing some job depends on the various income you need to fill many columns.

The w4 form shows the withholding so, every employee must fill this form. If you are hiring newly, then your employer gives you the W4 form.
It is vital to fill it out carefully. It is the only way to make all your precious earning legally with you. Else you can’t make income legal. Due to the tax cuts and jobs act 2017, five changes happen in the w4 form. You go through the new changes before filling.

There are five steps in W4 form filling. In step one, you provide the personal information. If you are single and doing one job, then fill first step and sign. In step two, you indicate the multiple jobs you are doing and your marital status.
In step three, you show the dependents and your child numbers. In step four, You fill other details and adjustments in your paychecks.
In step five, sign the form with the date. It is easy to fill the W4 form.

Main Differences Between W2 form and W4 form

  1. Employer fills the W2 form, and employee fills the W4 form.
  2. W2 shows the wages and taxes, and w4 shows the taxes and deductions.
  3. W2 is submitted every year, and w4 is consent before joining the new job.
  4. W2 needs to report to IRS, and W4 does not need to disclose to IRS.
  5. W2 has 25 distinct columns, and W4 has five sections.

Conclusion

Both the W2 and W4 forms are IRS forms. It is related to it that way only. Both are different in use and filled by distinct persons. These two forms help the employers and employees to manage the tax and paycheck yearly. It is vital to fill the form carefully. A single mistake may affect both the side. After filling the report must be sent to IRS, they check the correctness by comparing W2 and 1040 forms. These two forms aren’t the same that results in difficulty paying taxes and getting your income.

References

  1. https://pubs.acs.org/doi/abs/10.1021/acs.jctc.5b00135
  2. https://ieeexplore.ieee.org/abstract/document/1068619/
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