Which form is used by employers to determine how much federal income tax to withhold from an employee's pay?

The form used by employers to determine how much federal income tax to withhold from an employee's pay is the W-4. When an employee starts a new job or experiences a change in their financial situation, they fill out a W-4 form to indicate their tax situation to their employer. This includes information such as marital status and the number of allowances or exemptions claimed, which directly impacts the withholding calculations.

The W-4 form provides employers with the necessary information to withhold the correct amount of federal income tax from the employee's paycheck, thus helping the employee manage their tax liability throughout the year. This form is essential for ensuring that the appropriate amount of tax is set aside for the employee's federal tax obligations.

In contrast, the other forms listed serve different purposes: the W-2 summarizes an employee's earnings and tax withholding for the year; the 1099 is typically used for independent contractors and freelancers to report income; and the 1040 is the individual income tax return form used by taxpayers to report their income to the IRS at the end of the tax year.