Employers report the earnings paid to employees and the taxes deducted from those wages on a W-2 form, which is a tax form. The income tax, social security tax, and Medicare tax withheld from an employee’s pay are reported using this form. Employees utilize the W-2 form to prepare their tax returns; it is delivered to them by January 31 of the year following the tax year.
Contrarily, a W-9 form is a tax document used by people or organizations to certify their income to the payer and provide their taxpayer identification number (TIN). It is employed when a person or company receives money that is not subject to withholding, like a commission or rental income. The information on the W-9 form may be used by the income payer to report the income to the IRS.
Here are the primary distinctions between a W-2 and a W-9, in brief:
- Employers utilize a W-2 to list employee earnings paid and taxes deducted from those salaries. Individuals and corporations utilize a W-9 to provide their taxpayer identification number and certification of their income to the payer.
- The income tax, social security tax, and Medicare tax taken from an employee’s pay are reported on a W-2. For the purpose of withholding taxes, a W-9 is not used.
- A W-2 is needed to prepare tax returns and is distributed to employees by January 31 of the year after the tax year. The information on the W-9 may be used by the payer of the income to report the income to the IRS even though a W-9 is not filed with the IRS.
Conclusion
In conclusion, companies use a W-2 form to report salaries given to employees and taxes deducted, whereas individuals or businesses use a W-9 form to supply their taxpayer identification number and certify their income to the payer. To appropriately report and pay taxes, it’s crucial to comprehend the variations between these forms and when to utilize them.