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What is the difference between a W-2 and a W-4? I know they're both US income tax documents I have trouble keeping them straight.

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This is dumb, but I always remember them by knowing a w-2 comes to you, and a w-4 is for your employer. –  Pablitorun Mar 22 '12 at 14:15
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@Pablitorun I wouldn't call that dumb. We all have times that we need little things to help us remember things. –  Kellenjb Mar 22 '12 at 16:14
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2 Answers 2

A W-4 is what you submit to your employer at the start of your employment or any time you have a need to update your information. It tells the company a little bit about your tax situation so that they can properly estimate how much tax needs to be withheld from your pay check.

A W-2 is what your company sends to you at the end of the tax year. It is a summary of all of the income you made from them as well as all of the tax that has been withheld from your paycheck for the year. This form can also include some other special cases such as showing things that were performed pre-tax.

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You also use the W-4 to adjust withholding to account for changes to your life (getting married, having a kid) or to adjust your withholding to change the size of your refund, or to avoid owing a big payment in April. –  mhoran_psprep Mar 22 '12 at 13:12
    
@mhoran_psprep Yes, that is the type of information I mean by "your tax situation". –  Kellenjb Mar 22 '12 at 13:14
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The W-4 is the form with which you tell your employer how much tax to withhold. It's done with a very few bits of data. Marital status, number of exemptions (either dependents running around the house or deductions such as mortgage interest) each exemption is your way of telling the employer "don't tax $3800 of my income." Last, a box to say if you need more tax withheld.

W-2 is your employer's report to you at year end, everything about your earnings and withholdings, tax, child care, retirement, etc.

This is the W-4

And to see how the employer converts this to a deduction from pay

This is Pub 15, known as circular E.

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As I understand it, the employer is required to withhold income tax at rates set by IRS using data submitted on the W-4 form, e.g. a married person can request withholding at the single person rate, or claim fewer exemptions than will appear on the tax return (or more exemptions too if large itemized deductions are likely). I believe that requests for additional tax withholding are granted at the discretion of the employer. Additional withholding comes in handy to avoid quarterly payments of estimated tax on self-employment or investment income, and to account for the marriage penalty. –  Dilip Sarwate Mar 22 '12 at 14:49
    
The exemption number translates to a dollar amount per Circular E edited in above. I read W-4 as the employer has to comply with withholding request including extra amounts. –  JoeTaxpayer Mar 22 '12 at 19:30
    
I will defer to your knowledge about complying with extra withholding requests since I have not read the W-4 instructions for many years, and have only a vague memory of a statement saying that employers could choose to withhold and send in the extra amount but were not required to do so, or maybe this was allowed only for small employers who sent in withholdings to the IRS only on a quarterly basis. –  Dilip Sarwate Mar 22 '12 at 19:40
    
I'm not claiming knowledge. Really. I read the form, and see no warning that the employer can choose to comply or not. If you find a statement or example where they don't need to honor this, I'd like to see it, that's all. –  JoeTaxpayer Mar 22 '12 at 19:47
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