What form must an employee complete to indicate their tax situation to their employer?

An employee must complete the W-4 form to indicate their tax situation to their employer. The W-4 form is specifically designed for employees to communicate how much federal income tax should be withheld from their paychecks. By providing information on the W-4, such as marital status and the number of allowances claimed, employees can customize their withholding to better match their expected tax liability.

This is crucial because if too little tax is withheld, it may lead to a tax bill at the end of the year, whereas too much withholding results in smaller paychecks but could lead to a tax refund when filing the tax return. The W-2 form, on the other hand, is issued by employers at the end of the year to report an employee's earnings and the taxes withheld, while the 1099 form is typically used for independent contractors and freelancers to report income. The tax return, which is filed annually, summarizes an individual's income and tax obligations, but it is not a form that is provided to an employer for withholding purposes.