Withholding location + tax-deductible items

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• Does the location in which I withhold my income matter? Eg if I withhold in an interest-bearing bank account, am I then liable to pay taxes on the interest generated from the money I withheld? Or if I withhold in an investment account and then withdraw, I realize will have to pay capital gains tax but would there be any other considerations?
• Where I have tax-deductible / non-taxable items - IRA contributions, medical expenses, other - do I claim these back the same way at the end of the year? Should I just provide these as per normal at end of year to be treated as non-taxable income, or do I need to incorporate these into quarterly filings, or something else?