Contractor License Practice Exam

What must every employee provide when hired regarding tax allowances?

1. Form 1099-MISC

2. W-2

3. W-4

4. Form 1040

The correct answer is: W-4

When hired, every employee must provide a W-4 form to their employer. The W-4, known as the Employee's Withholding Certificate, is crucial as it informs the employer of the amount of federal income tax to withhold from the employee's paycheck. The information provided on the W-4, including allowances claimed, helps determine the withholding rate, ensuring that employees have the appropriate amount of taxes deducted from their earnings throughout the year. In contrast, the other forms mentioned serve different purposes. The W-2 is issued by the employer at the end of the tax year and reflects the total wages earned and taxes withheld, while Form 1099-MISC is typically used for reporting income earned by independent contractors or freelancers rather than employees. Form 1040 is an individual income tax return that taxpayers use to report their annual income and calculate their tax liability, but it is not required upon hiring. Thus, the W-4 is the correct and necessary form for new employees to submit at the time of hire concerning tax allowances.