What I Can Teach You About Resources
Irrespective of the business that you have, the tax forms are surely a part of the job, especially between the months of January and April. So many people would often confuse those tax forms W-4 and W-2 because they are somewhat related and they also have similar names. This would be used for reporting the employee’s tax situation. It is often a common mistake in the payroll to have such incorrect reporting on the holding of the W-4. You must know the difference of such two forms.
The IRS must be able to know the income which the people are able to get for the tax year. The employees must also have money withheld for the paychecks of workers to cover for such end-of-year tax bill. Those W4 and W2 forms would apply to the employees but not to independent contractors. The independent contractors may file their taxes differently.
An important thing that you have to know is that the W-4 form is a tax form which the employer asks their employees to fill up upon hiring. The worker must fill out such W-4 form unless they make only less than 800 dollars every year. Employers will be using such to compute for such federal income tax that should be reduced from the earnings of the employee. An employee must fill in based on the household earnings.
There are a lot of things making up the total number of those withholding options which are known as allowances. The things to take into consideration would include the number of dependents or children, the marital status as well as the employment status. If the financial status of the employee has changed, then one may update the W4 any time. The employers are not asked to request for those updates. If one is not very sure on the amount the employer must withhold, then you can actually check out the IRS online withholding calculator.
You must also know that the W-2 form is actually a tax form that the employers are going to issue to their workers on the end of each year. Such W-2 form is going to include the total amount of salaries which are earned by the employee. This reflects as well the amount of the state and also the federal taxes which the government has actually withheld. This also lists the contributions which were made to the Social Security during that tax year.
You will have to submit the information in April after getting the W2 form to pay your taxes and you also have to bring with you form 1040. It is annually that the employers should provide the W2 form to their employees by January 31. They must also send a copy to the Social Security Administration in February 29.