What is the difference between W2 and W4?

If you’ve ever started a new job and wondered why you had to fill out one form in January and receive another the following January, you’re not alone.

the W-4 form and W-2 The form is one of the most common IRS documents that IRS employees handle, and they are closely related. The W-4 controls how much tax is taken from each paycheck. Form W-2 summarizes these details at the end of the year so you can report your income and file your tax return.

Understanding how these models work together can prevent surprises at tax time — such as unexpected bills or refunds that are larger than necessary.

What if it is a W-4?

very: It tells your employer how much federal income tax to withhold from your paycheck.

When you start a new job, you complete a Form W-4. It is used by your employer to determine how much federal tax to withhold based on your filing status, dependents, and income adjustments.

Basic information you provide

• Deposit status – Single, married, or head of a family.
• Dependents – How many eligible dependents you have.
• Other revenues or deductions —Side jobs, second income, or itemized deductions.
• Additional blocking – You can request additional tax withheld for each salary.

The IRS redesigned the W-4 to simplify calculations. “Suits” are no longer used. Alternatively, you can enter dollar amounts directly for dependents and other income. You can see the example below or on Tax Authority website (PDF file).

When should you update your W-4?

Update your W-4 whenever your financial situation changes:

• Get married or divorced.
• You have or are adopting a child.
• You take a second job or your spouse starts working.
• You want to withhold more (or less) to match your expected tax bill.

Your employer will adjust your withholding from future paychecks based on the new form.

example

Maria, a nurse who makes $60,000, fills out her W-4 as “married, filing jointly,” and claims two dependents. Her employer withholds about $4,500 in federal taxes throughout the year. After filing her tax return, the total tax she owes is $4,600, so she only owes $100. The W-4 helped her keep her withholdings accurate.

What is Form W-2?

very: Reports your annual income and total taxes withheld for the year.

At the end of each calendar year, your employer must send you a letter Form W-2 by January 31. This form summarizes your wages, tips, and other compensation, as well as the amount of taxes withheld for federal, state, and Social Security purposes.

What’s on the W-2?

• Box 1: Wages, tips and other compensation.
• Box 2: Federal income tax is withheld.
• Box 3-6: Social Security, Medicare, wages and taxes.
• Box 15-20: State wages and state taxes were withheld.

You can use the information on your W-2 form when filing your annual tax return with the IRS.

Employers send copies of the same W-2 form to the IRS and state tax authorities, so the government can verify your reported income. You can view a sample W-2 form below or via Tax Authority website.

What to do if your W-2 has errors

If your W-2 form is wrong (for example, it lists the wrong Social Security number or income) ask your employer to correct it W-2C form. Keep both the original and corrected copies for your records.

How W-4 and W-2 work together

These models are directly related to:

• for you W-4 Determines the amount of tax to be withheld from each salary.
• for you W-2 The results of this deduction are shown at the end of the year.

In short, your W-4 affects your W-2. The more exemptions or dependents you claim on your W-4, the less taxes you will withhold — and vice versa.

How W-4 and W-2 work together

Can I update my W-4 during the year?

Yes. You can submit a new W-4 form at any time if your situation changes or if you want to adjust your tax withholding.

What happens if I don’t fill out Form W-4?

Your employer must withhold taxes as if you were single without any adjustments, which usually results in higher taxes withholding than necessary.

Can I get multiple W-2 forms in one year?

Yes. Each employer you work for must issue a separate W-2 form. You’ll need to include all of them when you file your tax return.

Does my W-2 form include state taxes?

Yes, if your state collects income tax. W-2 boxes show 15-20 state wages and taxes withheld.

Bottom line

The W-4 and W-2 are an essential part of your tax life.

• for you W-4 It helps ensure that the employer is withholding the appropriate amount of tax.
• for you W-2 It summarizes what happened during the year so you can file your return accurately.

Check your W-4 once a year — or after any major life event — to keep your paycheck and tax refund balanced.

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