Underwithholding(redirected from Underwithholds)
When a taxpayer has withheld too little tax from salary and will therefore owe tax when filing a return.
A situation in which an employer withholds too little from an employee's paycheck; that is, the employer gives too little of the employee's wages or salary to the tax agency. This occurs when the employee makes enough to qualify for a higher tax bracket that the one used for the paycheck. Underwithholding results in the employee owing taxes at the end of the year.