IRS tax forms, like a W-2 vs. W-4, differ in several ways, including who is responsible for filling out each form, what each form is used for, and how employees and employers are affected by the information filled out on each form.
Forms W-2 and W-4 are both basic tax forms we’ll all probably come across at some point in our professional lives. So it’s best to familiarize yourself with these two forms now so you aren’t confused about the differences later.
Form W-2: IRS Wage and Tax Statement
Form W-2, also called an IRS Wage and Tax Statement, is a tax document containing information about an employee’s job status, their earnings from a particular employer, and any deductions taken out of the employee’s pay for taxes, savings, retirement, or childcare.
Each year, employees will receive their Form W-2 reflecting their earnings of the previous year around January or February. For example, employees would receive their W-2s for the year 2023 in January or February of 2024. Then the next year, they will receive their W-2s for 2024 in January or February of 2025, and so on.
Employers are only required to send out W-2s if an employee’s annual income exceeds $600 during the prior tax year, even if they no longer work for that employer at the time they file. The IRS also specifies that employers must fill out W-2s for all qualified employees, even if that employee is related to the employer.1
Form W-4: An Employee’s Withholding Certificate
If you’ve ever started a new job with an established business, company, or commercial chain, you’ve most likely filled out Form W-4 before. Form W-4, also referred to as an Employee’s Withholding Allowance Certificate, is a form employees complete once they have accepted an offer of employment from an employer.
Based on the information provided on an employee’s W-4, employers know how much federal, state, and local taxes to deduct from their employee’s paycheck. Usually, employees must complete this form prior to receiving their first paycheck.
Key Differences Between Form W-2 and Form W-4
While Form W-2 and Form W-4 both have to do with an employee’s wages, they have some core differences. Check out more info about those differences below.
Who Fills Out the Form
Employees are responsible for completing Form W-4, while employers are the ones who fill out Form W-2. However, the information employees fill out on Form W-4 will influence how their employer fills out Form W-2.
Furthermore, only full-time employees are usually required to complete Form W-4. For example, independent contractors are usually not required to complete Form W-4. This is because taxes aren’t traditionally withheld from an independent contractor’s compensation, so the form isn’t really necessary.
What Each Form Means
The purpose of Form W-4 is to inform employers how much money to withhold from an employee’s paycheck. Form W-2 contains information regarding an employee’s annual wages and how much in taxes were withheld throughout a particular calendar year.
When These Forms are Required
Employees usually fill out Form W-4 when starting a new job or form of employment, and any time there is a change with their withholding allowances. For example, these situations may prompt you to alter your tax withholding allowances:
- Getting married
- Getting divorced
- Acquiring an additional job
- Having children
Form W-2, on the other hand, is required on a much more regular basis. Employers will fill out Form W-2 every year for employees to reference when completing their state and local taxes and/or their federal taxes. Typically, employers must fill out Form W-2 for distribution by January 31st each tax year.
Filing With the Social Security Administration
While employers should keep Forms W-4 for their business records, they don’t usually have to file them with any official tax agency or provide their employees with a copy of the form. Alternatively, employers must file Forms W-2 with the Social Security Administration as well as distribute a copy to their employees.
Other Tax Documents
Form W-2 isn’t the only document people use when completing their state and/or federal taxes. Below are some common forms people usually need when doing their yearly taxes.
| Form # | Form Name | Description |
| 1040 | U.S. Individual Income Tax Return | Main form for individual income tax return. |
| 1040-SR | U.S. Tax Return for Seniors | Simplified version of Form 1040 for taxpayers aged 65 or older. |
| W-2 | Wage and Tax Statement | Reports wages paid and taxes withheld by employers. |
| 1099-MISC | Miscellaneous Income | Reports various types of income other than wages or other tax credits. |
| 1099-INT | Interest Income | Reports interest income. |
| 1099-DIV | Dividends and Distributions | Reports dividend income. |
| 1098 | Mortgage Interest Statement | Reports mortgage interest paid. |
| Schedule A | Itemized Deductions | Used to itemize deductions instead of taking the standard deduction. |
| Schedule B | Interest and Ordinary Dividends | Reports interest and ordinary dividends. |
| Schedule C | Profit or Loss from Business | Reports income or loss from a sole proprietorship. |
FAQs: Form W-2, Form W-4, and Other Federal Income Tax Documents
Payroll tax forms are used to report wages paid to employees and the taxes withheld from those wages. Form W-2 reports an employee’s annual wages and the amount of taxes withheld, while Form W-4 determines how much tax should be withheld from an employee’s paycheck.
The tax year refers to the 12-month period for which tax information is reported. For most taxpayers, the tax year is the calendar year from January 1 to December 31. Forms W-2 and other tax documents typically cover this period.
A taxpayer identification number (TIN), such as a Social Security Number (SSN), is crucial for accurately reporting tax information. Employers use your TIN to report your earnings and tax withholdings to the IRS on Form W-2.
Medicare taxes are payroll taxes that fund the Medicare program. The Medicare tax withheld refers to the amount deducted from an employee’s paycheck for Medicare taxes, as reported on Form W-2.
Income tax withholding is the process of deducting federal income taxes from an employee’s paycheck. Form W-4 allows employees to specify how much tax should be withheld based on their filing status and allowances. Form W-2 then reports the total amount withheld for the year.
If you think there is an error in the amount of federal income taxes withheld from your paycheck, review your Form W-4 to ensure it is filled out correctly. You can submit a new W-4 to your employer to adjust your withholding. Additionally, you can consult with a tax professional for guidance.
Form W-2 provides information on your total earnings and the taxes withheld during the year. This information helps determine your overall tax liability when you file your federal tax return. It shows whether you owe additional taxes or are entitled to a refund.
Yes, local income taxes withheld from your paycheck are reported on Form W-2. This form includes separate boxes for federal, state, and local income tax withholdings.
Your filing status, such as single, married, or head of household, affects your tax withholding on your W-4. To update your filing status, complete a new Form W-4 and submit it to your employer. Changes in your personal circumstances, like marriage or divorce, may necessitate updating your filing status.
If you have questions about local income taxes, contact your local tax department. They can provide specific information about local tax regulations and how they apply to your situation.
To estimate how much tax will be withheld, use the IRS withholding calculator available on the IRS website. You can also refer to the instructions on Form W-4 and consider your filing status, number of dependents, and other factors that affect your tax withholding.
Forms 1040 and 1040-SR are used to file your annual federal tax return. Form W-2 provides the necessary information about your earnings and tax withholdings, which you need to complete these forms. Form W-4 ensures accurate tax withholding throughout the year, reducing the likelihood of owing taxes when you file.
A Word From CreditNinja About Federal Income Tax Documents
Completing your taxes on time is important to avoid fees or other inconveniences. Also, the sooner you complete your taxes the sooner you’ll get your refund! Or, if you owe, you can take care of the balance right away to get that stress off your mind. Looking for more finance information about keeping a budget, making a long-term financial plan, finding the best online loans, and more? CreditNinja has tons of free resources about funding, such as articles on unsecured loans or secured loans and helpful tools like financial calculators!
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