What is Withholding (taxes)?

Withholding (taxes) is an amount of an employee's income that an employer sends directly to the federal, state, or local tax authority as partial payment of that individual's tax liability for the year. When a person starts a new job, he/she is required to fill out a W-4 form on which she/he can indicate her/his filing status and the number of allowances she/he is claiming that affects the withholding amount. 


See Also:

Does Your CPA Pass the Quarterly Tax Test?

Ways to Reduce Taxes on Investments

Tax Facts for the Jobless

Repent at Tax Time for a Year of Spending Sins

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