Which form is used to determine the percentage of gross pay that should be withheld for taxes from an employee's paycheck?

The correct answer is B, Form W-4. This form is essential in the process of withholding taxes from an employee's paycheck because it provides vital information regarding the employee's tax situation. When an individual starts a new job, they fill out the W-4 to inform their employer about their filing status, the number of allowances, and any additional amount they wish to have withheld from their paychecks. This information is crucial for calculating the correct amount of federal income tax to withhold, ensuring that the employee neither owes a large sum at tax time nor pays excessively throughout the year.

The other forms serve different purposes in the realm of taxation and employment. Form I-9 is used to verify an employee's eligibility to work in the United States, while Form 1040 is the income tax return form individuals use to file their annual tax returns. Form 1099 is utilized to report various types of income other than wages, salaries, and tips, such as income from self-employment. Thus, while each form plays an important role within the scope of taxation and employment, Form W-4 is specifically focused on determining the withholding amount from paychecks.