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What document indicates a worker's status as an employee and details withholdings?
1099 Form
W2 Form
Tax Identification Form
Independent Contractor Agreement
The correct answer is: W2 Form
The W-2 Form is the correct document that indicates a worker's status as an employee and provides detailed information about withholdings. This form is issued annually by employers to report an employee's wages, tips, and other compensation, as well as the taxes that were withheld throughout the year. The W-2 form serves multiple purposes: it helps employees understand how much tax they owe or how much refund they can expect, and it also informs the IRS about the earnings and tax contributions of the employee. This makes it essential for accurate income tax filings. In contrast, other options such as the 1099 Form, Tax Identification Form, and Independent Contractor Agreement do not fulfill this dual purpose of identifying employment status and detailing withholdings for employees. The 1099 Form is primarily used for reporting payments made to independent contractors who are not classified as employees, while the Tax Identification Form may refer to various forms related to an individual or business’s tax identification but does not specifically detail employment status and withholdings. The Independent Contractor Agreement outlines the terms of work between a contractor and a client but does not report any tax or withholding information to the government or the worker.