Future Business Leaders of America (FBLA) Business Calculations Practice Test

Which form is required to complete and file an Income Tax return?

1. 1099

2. W-4

3. W-2

4. Schedule A

The correct answer is: W-2

The W-2 form is crucial for completing an income tax return because it provides a summary of an employee's wages and the taxes withheld over the course of the year. Employers are required to issue a W-2 to each employee by the end of January for the previous tax year. This form includes key information such as total earnings, Social Security and Medicare contributions, and federal and state tax withholdings, allowing the taxpayer to accurately report their income and calculate their tax liability. In contrast, the 1099 form is typically used for reporting income earned from self-employment or from sources other than wages, such as freelance work or interest income. The W-4 form is used to determine the amount of federal income tax withholding from an employee’s paycheck, but it does not provide information for completing a tax return. Schedule A is a supplemental form used for itemizing deductions, which is only relevant for taxpayers who choose to itemize rather than taking the standard deduction. Thus, the W-2 is the essential form for filing an individual income tax return.