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


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2015 Investor Glossary - All rights reserved - Terms of Use