Hello & welcome to the second Finance Friday post of the series!
A little about the series:
Finance Friday was started because often times in the arts finance and money are rarely discussed. While I can understand not wanting to compare salaries with coworkers, I personally think not talking about finance at all is CRAY. I want to start this series because money and finance can be so difficult to figure out and I wish I could have had some tips when I was first starting out.
So here we go! I'm breaking down W2's and W4's into the simplest of terms because the information on the internet can be overwhelming.
Congrats you #bookedit! You accept the job and you are ready to dive right in and get to work!
RIGHT?
WRONG.
First, you have to fill out TONS of paperwork. Typically this includes: a contract with your job duties (READ IT, READ IT ALL), an information sheet, a housing questionnaire (if housing is provided), an I9, a direct deposit form, and a W4! Sometimes it may include more forms depending on the job, but this is the basic layout.
All of these forms can be overwhelming the first time you have to fill them out. Honestly, I get overwhelmed every time I have to fill them out and I am constantly Facetiming my nana with a million questions . But with a little help from this here blog post about the W-4 and some practice, I promise you'll be an expert in no time.
First off: W-4 or the Employee's Withholding Allowance Certificate
What is it: An Input Document
When you receive it: After accepting a job/before the first payroll
What it looks like:
Now a W-4 also comes with a worksheet to help you fill out box 5 in the above picture. If you want to see an entire W-4 click on the photo above and it will take you to the sample on the IRS website.
First off, put in your first name, middle initial and last name. Next your social security number! This can be a little trickier if you don't have it memorized but I promise you'll have it memorized soon enough after putting it on 50,000 forms.
Next up is honestly the hardest part of the form (at least for me). Home Address. This will be on every form ever, but they try and trick you with different titles. Home Address. Mailing Address. Employee Address. Residential Address. Current Address.
But don't stress! The best bet is to put the address on your license down for everything.
Next up is your relationship status. They don't care about Joe Shmoe from Tinder though, so if you aren't married you are technically classified as "single".
Box 4 is easy peasy lemon squeezy.
BOX 5 INVOLVES THE WORKSHEET I MENTIONED EARLIER. Click the photo above to see said worksheet.
Essentially, if you are fresh out of college, single (unmarried), and don't have kids you will most likely be putting a 2 down in column 5. But double check! The higher the number, the less tax is withheld.
Fill out box 6 and 7 accordingly, sign the form, date the form and boom you did it!
Next up: W2 or Wage and Tax Statement
What is it: An Output Document
When you receive it: On/before January 31st
What it looks like:
This form is provided by the employer so you can then fill out your federal and states taxes. It shows you how much money in taxes was withheld from your paycheck for the year. If you are like me and not doing your own taxes yet, you need to make sure you get this form to the necessary party!
And if you do your own taxes, I'm really not sure why you are reading this because you are definitely more of an adult than me.
Now the thing about working in theatre is you are constantly changing jobs. Even if you aren't a freelancer, you tend to have your year round gig and your summerstock gig. Which means you will get multiple W-2's and fill out multiple W-4's. The forms may also look a smidge different based on the state it comes from, but they all will ask for/give you the same basic information.
My best piece of advice is to always keep a copy of these forms or any forms you fill out for a job! Whether it be a hard copy, a scan, or an iPhone picture, it's really helpful to have these to refer back to.
Well I hope this breakdown helps you understand the basic idea of WTF a W-2 and W-4 are! Click the photo below to find the website I used to help me with this blog post /for more information.
Much love always,
💜Chels