The jargon in the tax world can spin your head with a million questions and confusions. The tax forms aren’t just abstractly named, but they can make tax season a whole lot of trouble for self-employed people. Because when you’re in the “I’m my OWN boss” industry, you take on the employer and employee side of tax obligations…
But once you know the difference between Form W2 and W4 vs. W9, you can actively work towards accurate state income tax filings as well as higher amounts in tax returns!
In this blog, I’ve brought all 3 forms, minus the unnecessary fancy language that comes with it! Ready to do better in tax filing this year-end?
What is a W-2 Form?
A W-2 Form is a “Wage and Tax Statement” created by the IRS to record, report and track employee wages, federal income tax, and tax returns. In other words, it’s the tax situation of any full-time American employee on paper!
W2 Forms are filled out by the employer for each employee they hire full-time in their organization or business. It should include many important details, such as the amount of payroll taxes and fringe benefits being provided by your employer.
Hot tip: Before the end of each tax year (January 31st), double-check all your information including your social security code, name spellings, and dollar amounts.
If anything is even slightly mistaken, send it back to your employer for revision because the W2 Form is one of the most important tax documents you’ll fill out!
What is a W-4 Form?
The W-4 Form is known as the “Employee’s Withholding Allowance Certificate” and is a federal-level form meant for full-time employees to fill out. The W-4 form is used to understand how much income tax should be withheld from your federal income.
So as a full-time employee, you must mention your wages or salary and the amount of income tax withholding that slices your paychecks.
Employees should use the form and have it submitted to their employers within the same month they start a new job. Within the form, you’ll have to include the following information:
- Full name,
- Postal address and ZIP code,
- Social security number,
- Marital status,
- Number of dependents you have,
- Extra withholdings from your payroll (if applicable).
What is a W-9 Form?
Otherwise known as the “Request for Taxpayer Identification Number (TIN) and Certification”, this one-page tax form is made for self-employed individuals contractors.
You qualify as an independent contractor if:
- You don’t receive health insurance, 401(k) matching, and other benefits from your employers,
- Your rates are pre-determined or project-based instead of salaried,
- You pay all of your own taxes,
- Your work is task-focused instead of hourly.
The tax information within the W-9 form determines your paycheck amounts as well as the amount of tax withholdings for you to pay. It also recognizes that you’re responsible for withholding taxes from your paycheck as a self-employed person.
But you don’t submit the W-9 form to the IRS!
You submit this to your employer who hired you as an independent contractor, so you can receive a 1099-MISCO in return. Then you have to fill out the 1099-MISC form and send it to the IRS if you’ve earned over $600 a year.
Main differences between W2, W4, vs W9 forms
Now that you’ve got a better grip on each of these forms on their own, it’s time to look into the finer print. W-9 vs W-4 vs W-2 form differences are as follows:
| Properties | Form W-2 | Form W-4 | Form W-9 |
|---|---|---|---|
| Who fills out the form? | The employer of a full-time employee | Full-time employees | Independent contractors |
| What is the purpose of the form? | Used to file federal and state taxes with important information about income, tax, benefits, and returns | Inform your employer about how much tax should be withheld from paychecks | Provide your TIN to companies that hire you as an independent contractor |
| Deadline for 2023 | Before January 31st | Within the first month of starting a new job | Before January 31st |
| Who should issue the form and when? | Employer prepares a W-2 form before the end of the year | Employers should issue the form on the first day of hiring an employee | Businesses should issue the form before beginning a contract with the contractor |
| How many times should the tax form be issued? | Once a year is recommended | Only to be filled each time you begin a new job or face a financial change at your current job | Once a year is highly recommended but not required |
No matter which form you’re submitting, ensure that it’s done before its deadline. Not filing taxes on time can lead to some pretty sad consequences!
Frequently asked questions
While the table above should clear most of your W2, W4 vs W9 questions, I’ve compiled some of the most frequently asked questions about income tax filing below:
What is a 1099 form in the USA?
The 1099 form is a tax form used to report non-employment income to the IRS. Businesses and independent contractors such as influencers and content creators are required to submit a 1099 if they’ve received at least $600 as non-employment income or more during the tax year.
Do 1099 employees fill out a w4?
No, 1099 employees don’t fill out a W4 tax form. This is because Form W-4 is completed by a directly hired and “full-time” employee. But the 1099 employees are independent contractors with predetermined rates. So if you’re an independent contractor, you don’t fill out a W4 form for that income!
Is a W4 the same as a W2?
A W2 form is one that an employer fills out every tax year and records how much their employee was paid and how much income tax was withheld from them. On the other hand, a W4 form is one that an employee fills out to let their employer know how much income tax to withhold from their paychecks.
Does a W-9 withhold taxes?
No, a W-9 form doesn’t carry out tax withholdings on your behalf unless you’re subject to backup withholding. W-9 tax forms are filled out with personal information such as your taxpayer identification number and social security number to determine whether you’re subject to backup withholdings.
What is the difference between W2 and W9?
A W-2 form is one of the forms you need as an employer, as the form contains a full-time employee’s earnings during one tax year. But you fill out Form W-9 if you’re an independent contractor who earned at least $600. W-9 is used by tax authorities and your employers to recognize your work status and the amount of taxes you owe, if any!
Fill out the right IRS Form!
Now that you’re ready to fill out a form with confidence and can determine how much you pay with your current filing status, it’s time to reel in those massive tax returns!
As an influencer or small business owner, understanding tax forms can make all the difference in becoming financially aware to grow your business and income.
You’re ready to put your newfound knowledge of W2 and W4 vs W9 forms to the test and file those taxes with comfort!
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