Which financial document must be filed annually by an employee for tax purposes?

The correct choice is Form 1040. This document is essential for individuals when it comes to filing their annual federal income tax return in the United States. It summarizes an individual's income, deductions, and tax liability for the year, ensuring that taxpayers report their financial activity to the Internal Revenue Service (IRS).

Form 1040 allows employees to calculate their tax owed or refund due based upon their overall income, which can include wages, interest, dividends, and other earnings. It is the main tax form that reports annual income for both employees and self-employed individuals.

In contrast, Forms W-2 and W-4 serve different purposes. A W-2 is issued by employers to employees at the end of the year, reporting the wages paid and taxes withheld but is not filed annually by the employee. A W-4 is filled out by the employee when they start a job or when their financial circumstances change, indicating how much tax withholding should be taken from their paycheck. Schedule C is used for reporting income or loss from a business operated or a profession practiced as a sole proprietor and is often attached to Form 1040, but it doesn’t serve as the main annual tax return document on its own.