Certified Payroll Professional Practice Exam 2025 – Your All-in-One Guide to Exam Success

Form W-2 serves the specific purpose of reporting an employee's annual wages and the taxes withheld from those wages. This form is issued by employers to each employee and is crucial for the accurate filing of income tax returns. It summarizes the total earnings the employee received for the calendar year, as well as the amounts withheld for federal income tax, Social Security, and Medicare. Employees use the information on the W-2 to complete their tax returns, ensuring they pay the correct amount of taxes or receive any refund due.

The other options do not align with the purpose of Form W-2. For instance, reporting unemployment benefits falls under a different form, specifically Form 1099-G. Applying for a job position is unrelated to wage reporting and usually involves resumes and applications, not tax forms. Finally, while state tax liabilities may be inferred from the information in a W-2, the form itself is not designed specifically for calculating those liabilities directly; it primarily focuses on reporting earnings and withholdings. Thus, B is the accurate choice regarding the purpose of Form W-2.