jpeg: This file format is great for photographs or any art that doesn’t need a transparent background. As you can see in the above image if you were to submit that design as a .jpeg you would get a white box around the artwork.
.png: This file format is best for art that requires a transparent background. As you can see in the above image you will not get the “white box” and its a cleaner look.
Below is a great example how each file format will look on your shirt:
If you need more information, have additional questions or just can't find the answer to your question here, please submit a support ticket and one of our account managers will be happy to help.