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 ?
The amount that must be withheld in connection with the sale of US real property by a foreign person can be decreased (or eliminated) pursuant to a withholding certificate issued by the IRS.
The exceptions would treat a claimant that is the beneficial owner of the withheld payment as if a full deposit had been made, but only for purposes of a claim for refund or credit of an amount withheld under chapter 3 or 4.
As with most withholding taxes on payments made to foreign persons, the withholding agent needs to be aware of its withholding, remitting, and reporting obligations ahead of the transaction, as recouping any tax not originally withheld during the transaction is exceptionally difficult, especially in situations involving gross basis withholding.
In 2009, the Turkish government's income from taxes withheld was 32.
When taxpayers no longer see the money that is withheld from their paychecks, the cost of government becomes obscured.
The Canadian income taxes that are withheld (currently at a 15 percent rate) from distributions to U.
If the form is not completed correctly, the withholding agent could be subject to the 30% tax that was not withheld, plus interest and penalties for not withholding.
Q: Must the full 3 1/3 percent of the total sales price be withheld on installment sales?
tax generally required to be withheld under IRC section 1445 when a foreign person disposes of an interest in U.
71-52 in concluding that employment taxes were not required to be withheld or paid in connection with the exercise of ISOs and ESPP options, or the disposition of the stock received on exercise of such options.
Shareholders eligible for treaty benefits may obtain a refund of amounts withheld in excess of the applicable treaty rates from the Dutch tax authorities in The Netherlands.
This withholding tax must be withheld by the transferee, unless certain conditions for exemption or reduction of the amount are met, and must be reported and remitted by the transferee no later than the 20th day after the date of the transfer (Regs.