What is the Difference Between W2 W4 and W9?
🆚 Go to Comparative Table 🆚The main differences between Forms W-2, W-4, and W-9 are their purposes and the parties involved. Here's a brief explanation of each form:
- W-2 Form: This form is provided by the employer to the employee, summarizing gross pay for the year, including wages, tips, and other compensation. It also reports the amount of federal and state taxes, as well as Medicare, that were withheld from the employee's paychecks. Employers are required to send W-2 forms to employees by the end of January for the previous year's earnings and deductions.
- W-4 Form: Employees fill out this form to inform their employer's payroll department how much tax to withhold from their paychecks based on their filing status, number of dependents, and other factors. Withholdings include federal income tax, state and local taxes, and Social Security taxes.
- W-9 Form: This form is used by vendors, independent contractors, and freelancers to provide their identifying information, such as name, business name, address, and Social Security Number or Employer Identification Number, to their employer or client. Financial institutions and other businesses use the information on the W-9 to complete 1099 forms, which report non-employee income for tax purposes.
In summary, the W-2 form is an output document provided by the employer to the employee, the W-4 form is an input document filled out by the employee to inform the employer how much tax to withhold, and the W-9 form is an input document filled out by an independent contractor or vendor to provide their identifying information for tax purposes.
Comparative Table: W2 W4 vs W9
The main differences between W2, W4, and W9 forms are related to their purpose, the individuals they are assigned to, and the information they collect. Here is a summary of each form:
| Form | Purpose | Assigned to | Information Collected |
|---|---|---|---|
| W2 | Reporting year-end earnings and deductions | Employees | Salary income, federal and state taxes, Medicare withheld, employer ID number, and other deductions |
| W4 | Instructing employers on tax withholdings | Employees | Employee's personal data and the number of withholding allowances claimed |
| W9 | Gathering information of non-employee payees | Vendors, independent contractors, freelancers | Name, address, and taxpayer identification number |
Employers provide W2 forms to employees, while employees fill out W4 forms to inform the company's payroll department how much tax to withhold from their paychecks. On the other hand, W9 forms are used by businesses to gather information about non-employee payees, such as vendors, independent contractors, and freelancers, for tax purposes.
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