What is the name of the federal form that tells an employer how many tax deductions you will claim?

• A. W-4
• B. W-2
• C. W-9
• D. 1040

Answer: (A)

When you start a job, you decide how much federal income tax to withhold from each paycheck. The form you fill out for that purpose is called the W-4. It tells your employer how many withholding allowances you claim, which changes how much tax is taken out now. More allowances typically mean less tax withheld and higher take-home pay, while fewer allowances lead to more tax withheld. You can update it anytime your situation changes, like a change in marital status, dependents, or income.

The other forms serve different purposes: the W-2 is a year-end summary of wages and taxes withheld; the W-9 is used to provide your taxpayer identification information to a payer when you’re working as an independent contractor; and the 1040 is the annual tax return you file with the IRS to report income and compute any additional tax owed or refunds.