Investor Glossary-withholdingInvestor Glossary-withholdingInvestor Glossary-withholdingInvestor Glossary-withholdingInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Withholding

The HTML to link to this page
 

Withholding refers to the deduction of payroll taxes from an employee's paycheck in order to pay income taxes, Social Security, Medicare, and other taxes owed. The IRS requires that taxpayers pay their share of payroll taxes as they earn money throughout the tax year. The employer is required to withhold these payroll tax liabilities from each employee' paycheck. The withholding collected by an employer is then paid directly to the federal, state and, in some cases, local taxing authority. For federal withholding, a W-4 form is filled out by the employee. The W-4 form is used by the employer to determine the amount of withholding for each pay period. Withholding may need to be adjusted from time to time due to a change in filing status (e.g. marriage) or the addition of new dependent (e.g. new child) for example. To change withholding, the employee can, at any time, complete and give a new W-4 form to the employer. To assist taxpayers, the IRS provides an online withholding calculator which can be helpful to ensure that withholding is on par with tax liability therefore minimizing tax underpayment or tax refund.



Rate this withholding definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: diluted share, phantom income, labor relations, liquidity ratio, APR, per diem, ex-dividend date, ex-dividend, inflation, FICO score, option premium, average price per share, cancelled check, VIX, deferred revenue, covered put, class C shares, quality assurance, irrevocable trust, command economy, in escrow, wholly-owned subsidiary, retained earnings, debt service coverage, balance sheet, real GDP, required rate of return, 1031 exchange, minority interest, dividends payable, EBITDA, deferred tax, risk management, Key Rate Duration, 144a, annual return, implied volatility, limit order, LIBOR, 1035 exchange, margin rate, stock split, open position, 401a, reverse mortgage, current ratio, Zero Cost Collar, FTSE, stock market close


Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
Investor Glossary Index >>> # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
©2004-2014 Investor Glossary - All rights reserved - Terms of Use