Contractor License Practice Exam

Which document is typically completed to report wages and taxes withheld for a year?

1. W-4

2. W-2

3. Form 1099

4. 1040 form

The correct answer is: W-2

The document that is typically completed to report wages and taxes withheld for a year is the W-2. This form is issued by employers to employees and outlines the total wages earned and the amount of federal, state, and other taxes withheld during the year. The W-2 is critical for workers to accurately file their income tax returns, as it provides the information necessary to report taxable income and the taxes already paid through withholding. W-4 forms are used by employees to indicate their tax withholding preferences to their employers, but they do not report earnings or taxes withheld. Form 1099 is generally used to report income received from sources other than wages, such as freelance work or interest earned, and is not directly related to the reporting of wages and tax withholding for employees. The 1040 form is the individual income tax return that taxpayers file with the Internal Revenue Service (IRS) to report all income, claim deductions and credits, and calculate their tax liability, but it does not specifically report wages and taxes withheld as summarized on the W-2.