W-2 vs W-4: What’s the Difference & When to Use Them

Cody Cromwell
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The Difference Between W-4 & W-2: Inputs & Outputs

The difference between a W-2 and W-4 is that W-2 is an individual and W-4 is a jointly filed tax return (also known as a –married filing jointly,” –Joint return,” –Married”).

Both W-2 and W-4 are used to report wages, tips, and other compensation earned during the month.

As an employee, you will provide your employer with a W-2 on or before January 31.

An employer will provide you with a W-2 by February 28, which is generally used for annual tax filing. This means that an independent contractor is not required to file taxes as a proper W-2 can only be given to those who worked and were paid during the calendar year.

However, independent contractors are required to pay taxes at the end of the year based on their side business earnings.

If you are self-employed, you will need to keep track of all earnings during the year since your business transactions are greater. Instead of file with the IRS as a W-2 form, you will use the 1040 Schedule C to report your business taxes.

Details on a W-4: Employee’s Withholding Allowance

Every taxpayer is required to report federal income taxes withheld in boxes 1, 3, and 5 on Form W-2, Wage and Tax Statement.

The individual returns are sent to the IRS in the order the IRS receives them. IRS only uses the information from Box 1 to calculate how much tax to withhold from each of the taxpayer’s paychecks. The IRS also uses the information from Box 3 and Box 5 to determine how much money to place into a non-interest bearing special deposit account, called a Federal Tax Deposit (FTD) account, for the taxpayer. The IRS matches the amounts in the return to the amounts in the FTD account.

While you can receive a non-interest bearing deposit for tax withheld in Box 3 and Box 5, you are not required to do so.

A taxpayer may choose to voluntarily deposit tax withheld from Box 3 and Box 5 in a FTD account rather than on his or her individual return. However, if the taxpayer decides not to participate in the program, the IRS requires the employer to withhold taxes on the amount in Box 3 and Box 5, as above.

W-4 Allowance

W-2 Wages and Tax Statement Form is the income tax form employers use to report the withholding and reporting of your income. If you are getting a W-2, you can use it as a handy reference. The amounts listed on the W-2 are what you earned and withheld. W-2 forms are sent to your employer after the year ends.

W-4 Form

If you receive a W-4 Form or Request for Tax Withholding Allowance Certificate when you get a job, you will need to fill it out in order to have your employer withhold the right amount of tax from each paycheck. In this case, you will need to enter your personal information such as how many exemptions you wish to receive. If you get an additional allowance, you can take it, or you can enter less than you actually need.

The W-4 is a good form to fill out if you are just getting a job for the first time and have no previous experience with taxes and withholdings. It also gives you an idea as to how much tax is coming out of each paycheck. Basic knowledge of taxes will help you make the right decisions about how much to take out of every paycheck.

W-4 Exemption

One of the more confusing aspects of the federal tax code is wondering whether a W-2 or W-4 will be used to determine how much federal income tax an individual will owe. The answer is often ambiguous because the Internal Revenue Service sometimes requires a form other than the W-2 to determine how much taxable income will be reported.

The terms W-2 and W-4 are often referred to interchangeably, even though they serve different purposes….

The W-2 is the pay stub that is the end product of the W-2 process and is given to employees at the end of each year.

The W-4 is the form the employee fills out with their employer that is used to determine how much federal income tax will be withheld from the pay check.

The W-2 tax form is more specific when it comes to which tax practices will be used.

However, the W-4 is less specific and can include many different situations.

In practice, there are different approaches to the use of each form. The W-2 forms are used for payroll people and they use this form to calculate income tax withholdings.

But the W-4 is used by the individual to determine whether to withhold federal income tax.

State-Specific W-4 Forms

Did you know that there are three different versions of the W-4 Form? Depending on your state, you can use a W-2, a W-4 or a State-Specific W-4.


This form is used by every employer to withhold federal income tax from employees’ paychecks. So it’s used with payroll processing (OEMS) systems or human process of payment (HPP) systems. It’s also used to record state income taxes for interstate commerce with the U.S. Department of Transportation (DOT) (Form 720).


This is the most common W-4 form. It’s used to withhold federal income tax from employees’ paychecks. It’s also used to help employees with figuring their withholding allowances. The W-4 Form and the related instructions are distributed by the employee’s employer to the employees and their agents and/or tax advisers.

W-4 state exemptions vary by state. Some state exemptions allow for less withholding and some exemptions don’t allow for any withholding. To determine whether an exemption applies in your state, you’ll need to contact the tax department for your state.

Where to find a W-4?

W-4 is used to instruct you to withhold federal income tax from your paycheck. This means that you want to have a copy of it on hand before you submit your tax return.

You can get a copy of a W-4 from your employer or from the IRS. Some forms of retirement plans such as 401(k), 403(b), and 457 may require you to provide an employer your W-4.

Your W-4 is usually available on your pay stub, but you may have to request it from your employer. Make sure that you keep a copy of your W-4 for your records, and be sure to keep a hard copy of it as well, in case of an emergency.

Details on a W-2 Wage and Tax Statement

If you received a W-2 Wage and Tax Statement from your employer, you’ll find that it’s easy to navigate…until you get to the bottom. There you’ll see a section that lists your gross pay, taxes withheld, and net pay. Also at the bottom is your total federal income tax and a section of additional information that’s specific to businesses.

If you’re wondering what these numbers mean, read on for my breakdown of the W-2 form. You’ll learn about tax forms used by individuals, other forms, and more information on what your W-2 statement really means.

W-2 Forms Employers Use

W-2 forms are the federal tax forms used to report income and federal taxes withheld. There are two kinds of W-2s: one for individuals, and one for businesses. Individuals are employees and independent contractors. Businesses are corporations, partnerships, and sole proprietorships.

There are a few different ways employers can fill out the W-2 form, but at the end of the day, it’s the same form filled out and submitted to the IRS. Employers print them either from their computer software or in an online format.

Notice that Employee’s U.S.

Where to Find a W-2

If you’re an employee or an employer, you will definitely have occasion to use a W-2 and W-4 form. If this is your first time using either form, you may be wondering which is used to report money received and how the form works in order to file taxes.

The forms are different but serve the same purpose … and in fact, the IRS recommends that you file both. Be sure to keep them safe and handy for the upcoming tax season.

The W-2 Form

The W-2 form is given to employees as a wage statement. It has important tax implications for the employee and is used to prepare the Internal Revenue Service (IRS) Form W-2. The W-2 form is a comprehensive release that has the relevant tax information about a taxpayer. The information contained on the form includes the social security number, marital status, address, employer name, and gross compensation.

The W-4 Form

Employers send the W-4 form to their employees in order to calculate the number of withholding allowances. Employees can give employers any combination of allowances they choose. However, the IRS recommends that employers use the standard allowances for wage withholding. You can fill out the form on a new basis to change how much tax you’ll owe the following year, or perhaps to continue with certain tax programs.

When the W-2 is Due

When W-2 forms are requested by a taxpayer, they generally want to know when the forms are due. The important thing to remember is that the W-2 forms are due to an employer the same tax year that the employee earned the wages, tips or commissions. Therefore, if you earned your wages, tips or commissions in 2011, the W-2 forms would be due by the end of January 2012. And because this form is due to the employer by the end of January, if you do not file these forms by the tax deadline your employer must issue a 1099-MISC form to that employee for all of the income earned that was not reported on a W-2 form.

The IRS requires employers to furnish employees a form W-2 by January 31 of each year.

Form W-2A is the form for agriculture workers only and is due to the employer by January 31 and filed by the end of February. The extra time in the filing deadline is granted to provide the worker with a time to file their final tax return.

In the case of an unpaid employee who is not allowed to file a tax form electronically or is unable to file a tax form because of some medical condition, the employee must file Form W-4 by February 15 of the year and the form must be used if the income received during the year was more than the social security tax ceiling on the form.

W-2s for Contractors

So you are self-employed and making some money. Congratulations! But did you know that you are required by law to file a tax return with the government?

Yes, you read that right. If you are a self-employed taxpayer, you are required to file an income tax return every tax year. Should you decide to hire someone else to help you, you will pay half of that person’s paid income tax as an earned income credit and the other half as a self-employment tax. You can, of course, report business expenses and you can also choose to file a separate tax return on an income tax form different than your personal Form 1040. (In other words, if you hire someone to do some tasks for your business you can take credit or deductions from your personal income tax return.)

If you don’t want the hassle of doing income tax return filing yourself, you can hire a tax professional to do it for you. In general, you will pre-pay these professionals to work on your tax return. Of course, you should consult with a tax professional to determine whether you should hire a tax professional or not and to determine which tax form will work best for your needs.

So when you are self-employed, you will have to choose between 2 forms: the W-2 form or the W-4 form.

Bottom Line

What’s the Difference Between W-2 and W-4?

The W-2 form and the W-4 form are headed into 2016 as the forms employers must use to file federal income tax reports and wage and self-employment tax payments.

Before we get to the details of each form, here’s a simple explanation of how W-2 and W-4 filing works. The W-2 form is completed and mailed by an employer to employees with their January “ paystub. The W-4 form is completed and mailed by employees to their employers with their tax status and filing status. The employee is asked to give his or her employer a W-4 form to help with his tax situation.

Companies generally use paper forms in the filing process so that data from a variety of sources is combined and cross-referenced in a consistent manner. Both of these forms are short and simple: employees provide their name, address, social security number, and information about how they will be employed for the year, while employers provide their names and employers’ numbers and identify how much of an employee’s salary is taxable.

Learn more about both W-2 and W4 forms below.