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Backup Withholding Rate

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Backup Withholding Rate
The percentage of dividends, interest and other investment income one must pay if one fails to properly file one's tax identification number. The IRS informs companies and persons who are subject to backup withholding; this ensures the companies and persons pay the appropriate amount in taxes.


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Increase in Backup Withholding Rate Under section 3406, payments of interest, dividends, compensation paid to independent contractors, and other reportable payments made in the course of a trade or business are subject to backup withholding under certain circumstances.
IMPORTANT NOTICE 1-800-934-6802 Under the Jobs and Growth Tax Relief Reconciliation Act of 2003, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time the payment is made if the tax identification number is not properly certified.
 
 
 
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