What is the function of Form W-4?

Form W-4 is primarily used by employees to indicate their tax withholding preferences to their employer. When an employee starts a new job or experiences a life event that affects their tax situation, such as marriage or having a child, they fill out Form W-4 to specify how much federal income tax should be withheld from their paychecks. This helps ensure that the correct amount of tax is withheld, helping to avoid underpayment or overpayment of taxes throughout the year.

The purpose of this form is essential because it directly impacts how much take-home pay an employee receives and the potential tax liability they face when filing their income tax return. By accurately completing a W-4, employees can influence the amount of tax withheld based on their personal and financial circumstances, aligning their withholding with their tax obligations.

The other choices relate to different aspects of tax preparation and filing. For instance, applying for tax refunds involves submitting a tax return, whereas informing employees of their tax bracket is not something that Form W-4 does—the tax bracket is determined by the taxpayer's overall income and filing status. Additionally, requesting an extension for tax payment is a separate process that involves different forms and guidelines, specifically relating to the timing of tax payments rather than withholding preferences.