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What are tax forms? (Part 1)
In the U.S., most people will encounter several essential tax forms during their working years— specifically the I9, W4, W2, and W9. These documents each serve distinct purposes around employment verification, income tax withholding, reporting income, and requesting taxpayer identification. Understanding the basics of these forms is crucial, as it can make the tax filing process less complex for individuals, whether employed or self-employed. Created by Sal Khan.
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The point is to keep personally identifiable information out of the hands of scammers, so don't post a selfie with your tax forms showing your name, address, SSN, or other information. (It sounds silly, but in 2021, officials had to remind people not to pose with their vaccine cards with personal information showing.)(1 vote)
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Video transcript
- [Instructor] What we're
gonna do in this video is at least get you a little bit
familiar with a bunch of forms that you're likely to
see when you get a job. And I'm not gonna go into deep detail on each of these forms, but just to give you
some basic familiarity so that you aren't caught
unaware when you actually have to fill these out yourself. So the first form that you're going to see when you get a job as an employee, and I'll talk a little bit about being an employee
versus being a contractor, but if you're going to go work for wages and you're going to get benefits,
then you are an employee. And this right over here is a Form I9, employment eligibility verification. And this is just to make sure that you are qualified
to work in this country. So you have some just basic
personal information up here. And then you say whether you're a citizen, a non-citizen national
of the United States, a lawful permanent resident, or an alien authorized to
work, et cetera, et cetera. So that's the whole reason for this form. Now, another form that
you are going to fill out if you are starting a job
as an employee is a W4, employee's withholding certificate. And this is to let the employer know on every paycheck you get,
how much should be withheld and sent to the IRS? So we talk about this in other videos, but every time you get paid your employer is gonna
set aside some money and essentially pay your taxes. And at the end of the year,
when you do your taxes you're going to make sure that
the right amount was paid. If your employer withheld
more than they needed to, you'll get a refund,
you'll get some money back. And if the employer did
not withhold enough, then you are going to have
to pay some extra taxes. So once again, you just have your personal
information up here. And then they ask some
things about dependence and other things. And at the bottom of this, let me actually just go
down so that you can see it, you just sign that this is valid. So it shouldn't take you
too much time to fill it out but it can impact how
much is actually withheld on each pay cycle. Now, as you go into a new calendar year, so let's say we're
going from 2023 to 2024, usually in the beginning
of the new calendar year you'll get a W2. And this is very important for actually filling out your taxes. So this is essentially
a summary that you get from your employer. So the previous two I just showed, you fill it out when you start a job. But then in the new calendar year you get this from the employer. And it's really important
for filling out your taxes. Because when you fill out your taxes, you can put in these numbers of, well, what were your total wages,
tips and other compensation? How much was withheld? And remember that how much was
withheld could be influenced by that W4, how much
of this right over here is the social security wages. So the wages that could
be used to calculate how much social security tax is withheld. And it goes on and on and on. Trust me, you want this form. In fact, you need this
form, in most cases, around when you are actually filling your taxes. And it's interesting to look at because it's an interesting summary for what happened in that previous year. Now, everything I just talked about is if you are an employee. There might be situations
where you are a contractor. A contractor is also
someone who does something for a company, but an
employee is someone where you're getting wages,
you're getting regular wages for certain expectations, that you're maybe you're going to show up for a certain number of hours or do certain types of regular work. You typically will get benefits for that. While a contractor is
in some ways operating at a higher level, hey,
you're gonna build this for me and I'm gonna pay you,
but you're not an employee. You might do it only for
a certain amount of time. Or we, the company, can't decide when and how you do your work
as long as you get it done by a certain date. And so for contractors, you
might see a form like this. And this is really so that the company that is hiring the contractor can get a taxpayer identification number. Now you might be wondering, what is a taxpayer identification number? Well, in many cases if you're
just an individual contractor it might be your social security number. But there's other situations, I won't go into all of the details there. So the big takeaway, especially when you're starting
to engage with the company, especially as an employee and we just talked a little
bit about, as a contractor, you're gonna have to
fill out all these forms. Don't be intimidated by it. Most of 'em just require you to fill out some personal information. It's good to know what that form is for. And then you typically sign at the bottom. But hopefully now you're going to go in a little bit more prepared.