North Carolina Building Contractor License Practice Exam

Every employee must file a form _____ with their employer.

1. W-2

2. W-4

3. 1099

4. 1040

The correct answer is: W-4

The correct form that every employee must file with their employer is the W-4. This form is essential because it provides the employer with the necessary information to determine how much federal income tax to withhold from the employee's paycheck. The W-4 allows employees to indicate their filing status, as well as any additional allowances or deductions they may be claiming, which directly influences the withholding amount. For example, if an employee is married and has several dependents, they might fill out their W-4 accordingly to ensure less tax is withheld throughout the year. This can help to avoid over-withholding, allowing employees to keep more of their earnings upfront. The other forms mentioned serve different purposes: the W-2 is provided by the employer at the end of the year summarizing the employee's earnings and tax withholdings; the 1099 is typically used for independent contractors or freelancers to report income; and the 1040 is a personal income tax return form used by individuals to report their annual income to the IRS. Each form plays a unique role in the overall tax filing and withholding process, but only the W-4 is specifically required to be filed by employees with their employers.