Withholding

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Related to withholdings: Federal Income Tax Withheld

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 Obama administration's fiscal year 2010 revenue proposals include recommended changes to withholdings on payments of FDAP income.
For large contractors, this could mean tracking and properly accounting for withholdings made on thousands of payments each year.
2d 357 (1980), the taxpayer had argued the withholding and estimated tax payments were merely "deposits" and not tax payments until he filed his income tax return on June 1, 1993.
Any taxpayer may elect out of the modified withholdings by filing a new W-4 and using line 6 to specify the amount of additional withholding to be deducted from each paycheck, as shown in Table 1.
If this person's filing status is single and she has two allowances, she will pay an additional $120 per year in Yonkers withholding taxes (an extra $5.
24, specifies the following procedure for calculating withholdings.
A new guide prepared by the AICPA employee benefits taxation committee can help practitioners handle tax problems with benefit plans subject to new mandatory 20% income tax withholding provisions (See Tax Briefs, page 34).
All states, as well as the District of Columbia and the territories of Guam, Puerto Rico and the Virgin Islands, now have their own formulabased child support guidelines to determine child support awards and wage withholding and to modify previous awards.
The deposits are made from the withholding portion of the tax.
Income tax withholdings may have to be increased or additional estimated tax payments made to avoid a large balance due.
However, income tax withholdings are still necessary.
Nortem will be required under Dutch law to make tax withholdings from the final liquidating distribution to its shareholders with respect to the portion of the final liquidating distribution that is deemed a "dividend" for Dutch tax law purposes.