Which federal form tells the employer how many deductions you will claim for taxes?

• A. W-2
• B. W-4
• C. 1040
• D. 1099

Answer: (B)

This question is about withholding from your paycheck. The form you fill out to tell your employer how much federal income tax to withhold is the W-4. You use it to indicate your filing status, number of dependents, and any extra withholding. Based on that information, plus your wages, the employer calculates how much tax to take out each pay period using IRS tax tables. The more allowances you claim, the less tax is withheld; fewer allowances means more is withheld.

The other forms have different roles: the W-2 is what the employer gives you at year end to report how much you earned and how much tax was withheld; the 1040 is the annual tax return you file with the IRS; and the 1099 is used to report other types of income (like freelance work) to the IRS.