Learn more about Form W-2 vs W-4, what are the major differences, what is its role in taxes, how to file in 2023, who should file, and what is the overall process. With our research, you will not have any problem understanding Form W-2 vs W-4 in 2023.
Once your business starts making profits, you need to begin with your hiring process. With new employees coming in, you must also understand certain new tax forms. These include Form W-2 and Form W-4 which people usually confuse with each other. Let Mount Shine’s expert research and comparison on Form W-2 vs W-4 help you understand their importance and related terms to it.
W-2 vs W-4: Understanding The Basics And Importance [2023]
Form W-2 is the Wage and Tax Statement form that is provided at the end of the year. This form falls under the purview of the employer.
The employees will use the details provided on Form W-2 including the gross pay amount (tips, wages, payroll taxes, and contributions to the retirement fund) to file their personal income tax successfully.
Form W-4 is the Employee’s Withholding Certificate that is provided only once to a new employee. It is a form that must be filled out by new employees when they begin work for the new organization.
The employee will have to fill out this form before they start work at an organization and start earning tips, wages, or other compensation. It is not the responsibility of the employer after the form has been provided to the employee.
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What Is Form W-2? How Does It Matter In Filing Taxes? [2023]
Form W-2 is also called the Wage and Tax Statement form. It is filled by employers at the end of the year. It provides details regarding the detailed analysis of the employee’s pay and ascertains what has been deducted from their salary to pay for taxes such as medical insurance and social security. This form is significant for employees to file their own personal taxes by the end of the financial year. There are 6 copies of this form that must be filled out by employers.
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What Is Form W-4? How Does It Matter in Filling Taxes? [2023]
Form W-4 is also called the Employee’s Withholding Certificate form. It is filled by employees within the first month of joining a new organization. It is a form that provided information regarding the correct withholding amount for an employee’s payroll taxes. It is not the employer’s responsibility to fill the form but is indeed the employer’s responsibility to ensure that the new employees fill the form out in due time before they start earning wages and other compensation.
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W-2 vs W-4: Understanding The Key Differences [2023]
Compare the key differences between Form W-2 Vs W-4 in 2023 and get to know which form is required while filing taxes:
| Form W-2 | Form W-4 |
|---|---|
| This form is filled out by employers at the end of the year to provide details to their employees. | This form is filled out by employees in their first month of employment at a new organization. |
| Reports to the IRS what payments employers made to their employees over the course of a year. | Provides information to employers on how much federal tax to withhold from an employee’s payment service. |
| The employer must fill out one form for each employee. | The employee must fill out one form for each employer. |
| This form has to be submitted once every year. | This form has to be submitted only once for every employer. |
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Who Can File W-2 and W-4? [2023]
Employers can file Form W-2 in order to let the IRS know how much they are paying their employees. This also helps employees file their own personal taxes.
Employees can file Form W-4 within the first month of joining a new organization to let the employers know how much to withhold from their payroll.
Why You Should File W-2 and W-4? [2023]
You have to file a W-2 if you are a business owner and have hired employees. It is an annually filed tax document that contains information about the employee, their payroll, and the deductions. It lets the IRS know how much you pay your employees. It also lets the employees know how much to pay for their personal taxes. This form must be sent to employees completely filled by the 31st of January of every year.
You have to file a W-4 if you are employed in a new organization. It enables your new employer to get an idea of how much money they need to withhold for taxes such as social security and medical insurance. W-4 also needs to be filled by existing employees who are undergoing life and work changes such as marriage, divorce, childbirth, having more than one job, or having a dependant. This form enables you to understand how much money to deduct for federal, state, and local taxes.
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How To Use W-2 Forms? [2023]
Who fills it: The employer
Who is it filled for: The employee and the IRS
This is an annually filled form that lets the employee and the IRS know how much money you withheld from an employee’s payroll in order to pay federal, state, and local taxes. There are 6 copies of the form and all of them must be filled out and presented to the employee by January 31 of every year.
There are multiple copies of the W-2 form. The six copies you must complete are:
Copy A for the Social Security Administration
Copy 1 for the state, city, or local tax departments.
Copy B is to be filed by an employee with their federal tax return.
Copy C for the employee’s records
Copy 2 is to be filed by an employee with their state, city, or local tax return.
Copy D for the employer’s records
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How To Use W-4 Forms? [2023]
The employee has to fill out the W-4 form as a way of letting you know how much money you need to deduct from their payroll for taxes. This is an essential step in hiring new employees and accommodating existing employees with life changes.
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How To File W-2 and W-4 In Easy Steps? [2023]
Follow the steps given below to file W-2 and W-4 easily in 2023:
Requirements To File Form W-2 and W-4
You will need the social security numbers of the employer and the employees, the employer’s EIN, state ID number, and an idea about the taxes at the federal, state and local levels. You will also need to have the information about Medicare and retirement plans as well as what kind of tax plan the employee has opted for in order to file these two forms.
Steps To File Form W-2
Follow the steps given below to file Form W-2:
- Download the form from the IRS website. Note that all six copies of the form must be downloaded.
- Fill in all the boxes as mentioned from boxes A to F and then from boxes 1 to 20.
- Provide the copies to your employee by the 31st of January of every year. This is very important date so don’t forget this.
Steps To File Form W-4
Follow the steps given below to file Form W-2:
- Download the form from the IRS website.
- Fill in all the boxes as mentioned. These include personal information, multiple jobs or working partner, adding dependants if any, and adding other adjustments, signatures, and dates.
- Provide the copy to your employer within the first month of joining the new employment.
Where You Can Get W-2 and W-4 Forms
You can get the W-2 and W-4 Forms from the official website of the IRS.
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Conclusion
The forms W-2 and W-4 are essential in the financial system of any company because they make sure that you do not owe much money or any money at all to the IRS. These forms are also essential to stop exploitation and enable you to keep a record of the wages you provide to each employee.
Frequently Asked Questions
FAQ 1: What Do I Do If I Lost My W-2?
Answer: If you lose your W-2 form then the IRS will contact your employer by mail on your behalf and procure one for you. You can also call the IRS directly or schedule an appointment.
FAQ 2: How Much Money Do You Need to Make to Get a W-2?
Answer: Usually, you will need to make at least $600 in a year in order to get a Form W-2.
