Why do some employees fill out a W-4 and some don't?
I recognize W-4s are for calculating how much an employer should withhold from an employee for tax purposes. More allowances, less withheld. Less allowances, more withheld. This is the gist of it?
At my company, some employees have filled out W-4s while others have not. I'm confused at what the benefit of this is for the employee vs. the employer?
I honestly didn't realize that some employees do not have to fill out W-4s when on-boarding a job.
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There's two cases to consider where co-workers aren't really employees of the company:
Self-employed
These workers are independent contractors paid via a 1099. As self employed, they pay tax directly to the IRS and compute the appropriate allowances themselves.
Contract Employees
These employees are paid by a contractor or staffing service and would have submitted paperwork through their direct employer.
This is functionally the same as submitting a W4 claiming 0. The employee is defaulted to the highest withholding for taxes. Some people like the quasi-forced-savings aspect of excess withholdings and the resulting refund check(s).
It doesn't make an ounce of difference to the employer.
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