Overwithholding

(redirected from Over-Withholding)

Overwithholding

Deducting and paying too much tax that may be refunded to the taxpayer or applied against the next period's obligation.

Overwithholding

A situation in which an employer withholds too much money from an employee's paycheck and gives the funds to the tax agency. This occurs when the employee does not make enough to qualify for the tax bracket used on the paycheck, or when the employee takes enough itemized deductions for which the withholding does not account to reduce his/her tax liability. Overwithholding usually results in a tax refund or in the application of the amount to next year's taxation.
Mentioned in ?
References in periodicals archive ?
These tables were designed to produce the correct amount of tax withholding -- avoiding under- and over-withholding of tax -- for those with simple tax situations.
Adding only one allowance to Paul's W-4 may still result in over-withholding and make for a financially strained year.
In order to prevent over-withholding in some cases, the law permits an employee who has unusually large excess itemized deductions to claim one or more additional exemptions.
Do you know that over-withholding is like making an interest free loan to the IRS?
However, application of this ruling could also lead to over-withholding in many instances.
Does over-withholding and getting a refund in this manner make sense financially?