Withholding


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Withholding

Used in the context of securities, the illegal practice of a public offering participant keeping some shares in a private account or with a family member, employee, or dealer to profit from the higher market price of a hot issue.
Used in the context of taxes, the withholding by an employer of a certain amount of an employee's income in order to cover the employee's tax liability. Also used to refer to the withholding by corporations and financial institutions of a flat 10% of interest and dividend payments due to security holders.

Withholding

The act or practice of not giving a certain percentage of money that otherwise belongs to a person. Withholding must occur in accordance with appropriate laws and may not be arbitrary. Withholding is most common in taxes, in which an employer retains a certain percentage of an employee's wages or salary and gives it to the IRS instead of the employee. Likewise, a manual rollover to an IRA is subject to a 20% withholding. Courts may order withholding for reasons such as child support or alimony. See also: Overwithholding.

withholding

1. The holding back of a portion of wages, dividends, interest, pension payments, or various other sources of income for payment of taxes to the U.S. Treasury. See also backup withholding.
2. The illegal holding back of a portion of securities allocated as part of a new issue to a member of an underwriting syndicate. The underwriter may wish to keep the securities or resell them to a designated party so as to profit from an expected price rise soon after the issue has been offered to the public.

Withholding.

Withholding is the amount that employers subtract from their employees' gross pay for a variety of taxes and benefits, including Social Security and Medicare taxes, federal and state income taxes, health insurance premiums, retirement savings, education savings, or flexible spending plan contributions, union dues, or prepaid transportation.

Contributions to tax-deferred savings plans are withheld from your pretax income, as are amounts you put into tax-free flexible spending and prepaid transportation accounts. Those amounts reduce the taxable salary that your employer reports to the IRS.

References in periodicals archive ?
If you or your client is a pass-through entity, such as an S corp, partnership or limited liability company classified as a partnership, and the pass-through entity withheld money and paid to us by another entity, then it can claim a portion (not to exceed the total tax and fee due) of the withholding credit on the line of its tax return and pass-through the remaining credit to its pass-through owners.
1445(b) outlines several situations that are not subject to withholding, including:
Next, the withholding allowances of $14,600 (4 x $3,650) are subtracted from the $98,400 annual wage to arrive at $83,800, the amount of wages subject to tax.
Two FEI technical committees, the Committee on Taxation (COT) and the Committee on Government Business (CGB), have worked closely with the Government Withholding Relief Coalition to support the Craig legislation.
income subject to withholding must provide IRS Form W8BEN to the withholding agent.
The worker does not itemize deductions and claims no withholding allowances on Form W-4.
If this seems like a far-fetched guess at what went on in the minds of the Justice Department attorneys, Anne Burford's account of her early discussions on the topic of withholding the documents bears repeating.
The pilot's goal is to encourage even more taxpayers to enroll in and use EFTPS when the service can be used to pay both state withholding and federal taxes.
To be exempt from withholding, these entities must certify to the withholding agent that they have no substantial U.
The withholding requirement was added to IRC [section] 3402(t) by the Tax Increase Prevention and Reconciliation Act of 2005 (PL 109-222).
1, payers who are required to withhold and remit backup withholding to the IRS are also required to withhold and remit to the FTB.
Expeditiously negotiate and implement a new provision in the Income Tax Convention with the United States eliminating withholding on all dividends and interest for payments to both related and unrelated parties.