What is the W-4 form used for?

• A. A statement of an individual's annual wages
• B. A federal tax form that indicates how much should be withheld from pay
• C. A form used to report wages
• D. A form used to apply for a tax credit

Answer: (B)

The W-4 form is used to tell your employer how much federal income tax to withhold from your paycheck. You fill it out when you start a job and can update it if your situation changes (like marriage, a new dependent, or wanting more or less tax taken out). The withholding amount you set on the W-4 affects how much tax is taken each pay period, not your actual wages. At year end, the W-2 reports how much you earned and how much was withheld, not how much you should withhold. It’s also not used to apply for tax credits; those are handled when you file your tax return.