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 ?
Scenario 2: Decreased utilization and withhold returned, resulting in an increase in revenue.
However, Lundon warned that he will withhold the tax he collected in May if no progress is made on solving the crisis.
But neither Dinkins, who was one of the lawyers at the October meeting when the decision to withhold the documents was made, nor her primary assistant had looked at the documents.
All comments used in Feedback must be signed, but we will withhold names on request.
Withholding requirements: Generally, a transferee of a USRPI must withhold, report, and pay over to the IRS a tax under Sec.
1, people buying California real estate must withhold 3 1/3 percent of the sales price and send it to the FTB, to comply with AB 2065.
As a general rule, a withholding agent must withhold 30% on U.
However, withholding on the full sales price can be deferred if the buyer agrees to withhold 3 1/3 percent of the down payment and 3 1/3 percent of each payment thereafter.
3402(h)-1 the employer may withhold on the basis of average estimated tips.
Generally, a withholding agent must withhold 30% tax on FDAP income unless the agent can reliably associate the payment with documentation that the payment is made to (1) a payee that is a U.
1, escrow companies must withhold 3-1/3 percent of the sales price of any real estate sold that is more than $100,000, not a personal residence, and not a 1031 exchange, 1033 involuntary conversion or a foreclosure.