23
QuizMultiple Choice

Saving and Making Financial Decisions — Test

Question 23 • Personal Finance

What is the W-4 form used for?

Answer
A
calculating how much income was paid in the previous year
B
filing taxes with the federal government
C
calculating how much tax should be withheld from a person’s paycheck
D
determining the amount of money an employee has paid out in taxes

Explanation

A W-4 tells an employer how much federal income tax to withhold from an employee’s paycheck. The employer uses that information to calculate the withholding for each pay period, so the correct choice is “calculating how much tax should be withheld from a person’s paycheck.” Filing a tax return is done with a different form, such as Form 1040.

AI-written and checked against the verified answer.

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