Louisiana Contractors License Practice Exam

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Prepare for your Louisiana Contractors License Exam with multiple choice questions. Each question includes hints and detailed explanations to enhance your understanding. Improve your chances of passing the exam on your first attempt.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What IRS form is used to determine federal tax withholding?

Form W-4
Form W-5
Form 1099
Form W-2

The correct answer is: Form W-4

Form W-4 is the correct choice for determining federal tax withholding. This form is completed by employees and submitted to their employer to indicate their tax situation. By doing so, employees can specify their filing status, the number of allowances they claim, and any additional amounts they wish to withhold from their paychecks. Based on the information provided on the W-4, employers calculate the appropriate amount of federal income tax to withhold from the employee's earnings. Understanding this is crucial for both employees and employers to ensure proper tax withholding, avoiding underpayment penalties or over-collection of taxes. Other forms listed do not serve this specific purpose: Form W-5 is related to advance tax credits for qualifying individuals, Form 1099 is used to report various types of income other than wages, and Form W-2 is used to report annual wages and the amount of taxes withheld for employees.