DECA Human Resources Management Practice Exam

Which of these forms is crucial for an employer to calculate the correct amount of tax withholding from an employee’s paycheck?

1. W-2

2. W-4

3. W-9

4. 1099

The correct answer is: W-4

The W-4 form is essential for employers to determine the correct amount of tax withholding from an employee's paycheck. This form allows employees to provide important information about their tax situation, including their marital status, number of dependents, and any additional amounts they wish to have withheld. Based on the information submitted on the W-4, employers can calculate how much federal income tax should be deducted from an employee's pay. In contrast, the W-2 is a form that an employer issues to employees at the end of the tax year, summarizing total wages and the amount withheld, but it does not influence withholding calculations. The W-9 is utilized by independent contractors and freelancers to provide their taxpayer identification number and does not pertain to employee withholding. The 1099 form relates to income received from non-employment sources, such as freelance work or interest income, and is also not relevant to the calculation of tax withholding from an employee's paycheck.