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New Member
posted Jul 26, 2021 4:50:47 AM

Can you explain tax withholding

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2 Replies
Level 15
Jul 26, 2021 5:27:08 AM

A withholding tax takes a set amount of money out of an employee's paycheck and pays it to the government. The money taken is a credit against the employee's annual income tax. If too much money is withheld, an employee will receive a tax refund; if not enough is withheld, an employee will have an additional tax bill.

 

https://www.investopedia.com/terms/w/withholdingtax.asp#:~:text=A%20withholding%20tax%20takes%20a,have%20an%20additional%20tax%20bill.

Level 15
Jul 26, 2021 12:00:19 PM

in some cases a taxpayer can request that withholding be taken out of certain payments like Social Security, pension and IRA distributions, Unemployment compensation payments abd certain others.