Difference Wiki

W-4 vs. W-2: What's the Difference?

Edited by Sawaira Riaz || By Sumera Saeed || Updated on October 14, 2023
The W-4 form helps employers calculate federal tax withholdings, while the W-2 form reports an employee's annual wages and the amounts withheld for taxes.

Key Differences

The W-4 is an essential document used by employers to determine the correct amount of federal income tax to withhold from an employee’s paycheck. On the contrary, the W-2 form serves as an official record, illustrating the total earnings of an employee and the taxes withheld over the past year. Both forms are integral to the U.S. tax system, although they serve different purposes in the tax preparation and filing process.
Sumera Saeed
Oct 14, 2023
An employee typically fills out a W-4 form when they begin a new job, or when their financial or personal situation changes, such as after getting married or having a child. The W-2, on the other hand, is prepared by the employer and issued to the employee and the IRS, summarizing the employee’s financial and tax details for the previous calendar year.
Sumera Saeed
Oct 14, 2023
The W-4 form is mainly a tool used for calculating the amount of income tax that must be withheld from an employee's paycheck. It requires inputs about an employee’s income, dependents, and other relevant factors. In contrast, the W-2 form offers a comprehensive view of the employee’s annual income and specifically breaks down how much was deducted for state, federal, and other taxes throughout the year.
Sumera Saeed
Oct 14, 2023
Employers utilize the information provided on the W-4 to ascertain how much federal income tax to withhold from an employee’s pay. Differently, the W-2 form does not require any action from the employee for its preparation, but it's vital for them when they file their personal income tax return, to verify the income earned and taxes paid.
Janet White
Oct 14, 2023
It's paramount that the W-4 is accurate to avoid under or overpayment of taxes throughout the year. In a different vein, the W-2 is crucial for ensuring that the information submitted to the IRS during tax filing is accurate, to help avoid any potential discrepancies or issues with an individual’s tax return.
Janet White
Oct 14, 2023
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Comparison Chart

Purpose

To determine tax withholdings
To report annual wages and withholdings
Sumera Saeed
Oct 14, 2023

Filled Out By

Employee
Employer
Sumera Saeed
Oct 14, 2023

Timing

When starting a job or personal changes occur
Annually, sent by Jan 31st of the following year
Sumera Saeed
Oct 14, 2023

Main Recipient

Employer
Employee (also sent to IRS)
Sara Rehman
Oct 14, 2023

Usage in Tax Filing

Used for calculating withholdings
Used to file individual’s tax return
Harlon Moss
Oct 14, 2023
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W-4 and W-2 Definitions

W-4

The W-4 includes adjustments for dependents and deductions.
After having twins, Emily updated her W-4 to reflect her new number of dependents.
Sumera Saeed
Oct 14, 2023

W-2

A W-2 form documents an employee’s annual earnings and tax withholdings.
Sarah received her W-2 and checked it for accuracy before filing her taxes.
Sawaira Riaz
Oct 14, 2023

W-4

Employees can revise the W-4 for changes in their financial situation.
Following their wedding, Kevin and Sue revised their W-4 forms to reflect their married status.
Janet White
Oct 14, 2023

W-2

W-2 forms are crucial for filing federal and state income taxes.
Jake utilized the information on his W-2 to file his state and federal tax returns.
Sumera Saeed
Oct 14, 2023

W-4

The W-4 allows employees to account for multiple income sources.
John adjusted his W-4 to account for the additional income from his freelance work.
Sumera Saeed
Oct 14, 2023

W-2

A W-2 form provides a comprehensive breakdown of various tax withholdings.
Roberto used his W-2 to understand the total amount withheld for federal taxes throughout the year.
Sumera Saeed
Oct 14, 2023

W-4

A W-4 may impact the employee’s take-home pay based on claimed allowances.
Jeff claimed fewer allowances on his W-4 to increase his take-home pay.
Sara Rehman
Oct 14, 2023

W-2

Employers are mandated to issue W-2 forms to their employees and the IRS.
As an employer, the company ensures that all employees receive their W-2 by January 31st.
Sumera Saeed
Oct 14, 2023

W-4

A W-4 form assists in determining the federal tax withheld from a paycheck.
When starting her new job, Lisa completed her W-4 form to ensure accurate tax withholding.
Sawaira Riaz
Oct 14, 2023

W-2

W-2 forms may be provided either electronically or in paper format.
Tina opted to receive her W-2 electronically through her employer's payroll platform.
Sara Rehman
Oct 14, 2023

FAQs

How often are W-2 forms issued?

W-2 forms are issued annually, typically by January 31st of the following year.
Aimie Carlson
Oct 14, 2023

When should an employee fill out a W-4 form?

Employees should complete a W-4 when starting a new job or when personal or financial situations change.
Sumera Saeed
Oct 14, 2023

What specific information is found on the W-2 form?

The W-2 form reports an employee's annual wages and the amounts of taxes withheld for federal, state, and social security.
Aimie Carlson
Oct 14, 2023

Can the W-4 form affect the size of an employee’s paycheck?

Yes, the allowances and deductions claimed on a W-4 can influence the amount of tax withheld and consequently, net pay.
Sumera Saeed
Oct 14, 2023

Can an employee request to adjust their withholding after submitting a W-4?

Yes, employees can adjust withholding by submitting a new W-4 to their employer at any time.
Aimie Carlson
Oct 14, 2023

What is the main purpose of a W-4 form?

A W-4 form helps employers determine the correct federal income tax to withhold from an employee's paycheck.
Sumera Saeed
Oct 14, 2023

Who is responsible for filling out the W-2 form?

Employers complete the W-2 form, providing copies to the employee and the IRS.
Sawaira Riaz
Oct 14, 2023

Can an employee change information on the W-4 after initially filling it out?

Yes, employees can submit a new W-4 to their employer whenever necessary to update their withholding allowances.
Sumera Saeed
Oct 14, 2023

Who is eligible to receive a W-2 form?

Any employee who has earned wages or salary from an employer should receive a W-2 form.
Janet White
Oct 14, 2023

Is the W-2 form required for filing taxes?

Yes, information on the W-2 form is vital for preparing personal income tax returns.
Janet White
Oct 14, 2023

Is there a deadline for employers to send out W-2 forms?

Yes, employers are required to send W-2 forms to employees by January 31st of the year following the tax year.
Aimie Carlson
Oct 14, 2023

What happens if an employee fills out the W-4 form incorrectly?

Incorrect information on a W-4 may result in under-withholding or over-withholding of federal income taxes.
Sumera Saeed
Oct 14, 2023

Does the W-4 form need to be filled out annually?

No, the W-4 does not need to be filled out annually, but it should be updated for significant life or financial changes.
Harlon Moss
Oct 14, 2023

Are there penalties for not completing a W-4 accurately?

Yes, providing false information on a W-4 can result in fines and penalties from the IRS.
Sumera Saeed
Oct 14, 2023

How does an employer utilize the information on a W-2?

Employers use W-2 forms to report wage and salary information to the IRS and provide tax information to employees.
Aimie Carlson
Oct 14, 2023

Is it mandatory for all employees to fill out a W-4 form?

Yes, employees are typically required to complete a W-4 form to help employers calculate accurate tax withholdings.
Sumera Saeed
Oct 14, 2023

What should an employee do if they do not receive their W-2?

Employees should contact their employer or HR department if they do not receive their W-2 by January 31st.
Sara Rehman
Oct 14, 2023

Can an individual access a copy of the W-2 form online?

Some employers and payroll services provide electronic access to W-2 forms.
Sumera Saeed
Oct 14, 2023

Is it possible for an employee to have zero withholdings on their W-4?

Yes, an employee can claim exemption from withholding on the W-4, under certain conditions.
Harlon Moss
Oct 14, 2023

Can an employee access the W-4 form online?

Yes, many employers provide electronic access to W-4 forms through payroll or HR platforms.
Harlon Moss
Oct 14, 2023
About Author
Written by
Sumera Saeed
Sumera is an experienced content writer and editor with a niche in comparative analysis. At Diffeence Wiki, she crafts clear and unbiased comparisons to guide readers in making informed decisions. With a dedication to thorough research and quality, Sumera's work stands out in the digital realm. Off the clock, she enjoys reading and exploring diverse cultures.
Edited by
Sawaira Riaz
Sawaira is a dedicated content editor at difference.wiki, where she meticulously refines articles to ensure clarity and accuracy. With a keen eye for detail, she upholds the site's commitment to delivering insightful and precise content.

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