What are tax forms? (Part 1)

- [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.