When it comes to their differences, W-2 and W-4 forms can be distinguished by who files them, their timings, and more.
W-4 forms are filled out by employees for employers. On the other hand, W-2 forms are filled out by employers for employees.
Plus, in any business system, W-4 forms are usually filled out first since they come during the first stages of employment. W-2 forms are filed during a year’s worth of employment by the employer.
Another major difference between the two forms is the purpose of each one. W-2 forms are used by employers to report yearly employee income information, including:
Withholdings
Social Security
Medicare
A W-4 form’s main purpose is to share the amount that needs to be taken from an employee’s earnings and given to the IRS.
The employer extracts this form and analyses the factors that need to be taken into consideration when deducting the amount. These can encompass the number of dependents and withholding preferences.