What tax form must an employee receive from their employer that summarizes their annual wages and the taxes withheld?

• A. Form 1099
• B. Form W-2
• C. Form 1040
• D. Form 1098

Answer: (B)

The form that summarizes an employee's annual wages and the taxes withheld is Form W-2. This document is provided by the employer to the employee at the end of the tax year and details the total amount earned in wages along with the federal, state, and local taxes that were withheld throughout the year. This information is crucial for employees when they file their personal income tax returns, as it provides the necessary data to accurately report income and determine tax liabilities.

In contrast, other forms mentioned serve different purposes. Form 1099 is typically used for reporting income from sources other than wages, such as freelance work or interest income; Form 1040 is an individual income tax return form used by taxpayers to report their annual income; and Form 1098 reports mortgage interest paid, which is relevant for taxpayers claiming a deduction on their mortgage interest. Each of these forms addresses specific reporting requirements but does not summarize wages and tax withholdings like Form W-2 does.