Which document is used to manage federal income tax withholding for employees?

The Form W-4 is the document that employees fill out to indicate their tax situation to their employer, which in turn helps manage federal income tax withholding from their paycheck. By providing information such as marital status, allowances, and any additional amount they wish to have withheld, employees enable their employers to calculate the appropriate amount of federal income tax to withhold during payroll. This ensures that employees pay the correct amount of income tax throughout the year, avoiding underpayment or overpayment when they file their tax returns.

In contrast, Form W-2 is used by employers to report wages paid to employees and the taxes withheld from those wages at the end of the year. Form 1099 is generally used to report income received by independent contractors or freelancers, while Form 1040 is the individual income tax return form that taxpayers use to report their income, deductions, and tax liability to the IRS. Thus, while all these forms play important roles in the tax process, the W-4 specifically relates to managing withholding for employees.