Underwithholding

(redirected from Underwithheld)

Underwithholding

When a taxpayer has withheld too little tax from salary and will therefore owe tax when filing a return.

Underwithholding

A situation in which an employer withholds too little from an employee's paycheck; that is, the employer gives too little of the employee's wages or salary to the tax agency. This occurs when the employee makes enough to qualify for a higher tax bracket that the one used for the paycheck. Underwithholding results in the employee owing taxes at the end of the year.
References in periodicals archive ?
Therefore, an underwithheld taxpayer can lessen or eliminate the penalty for underpayment/underestimation by withholding substantially more at the end of the year.
The withholding agent is secondarily liable for any underwithheld tax.
If you don't, and it later turns out that the employee intentionally underwithheld taxes, your firm is liable for the difference between what was withheld and what should have been--per paycheck.
Remember, too, that you can't get the underwithheld money back from your employees.
8) For example, underwithheld taxpayers tend to perceive payments to the tax agency as losses while overwithheld taxpayers tend to perceive refunds from the tax agency as gains.
Taxpayers with relatively simple tax situations may find that their Federal income tax will be underwithheld by their employer(s) for 1994 resulting in a balance due on their 1994 returns early in 1995.
Reinforcing the blow to consumers will be the recognition that income taxes were underwithheld for most workers in 1992.
If the fiduciary determines that tax was underwithheld under Sec.
While this has no effect on the single taxpayer, a married couple may easily be underwithheld if their combined income is more than $250,000 but neither makes more than $200,000 individually.
As a technical matter, the employer should pay the amount of federal income tax that was underwithheld.
Source Income of Foreign Persons, to report and pay any underwithheld tax (including interest and penalties) that the Service determines is due after the filing of the QI's Form 1042 for the calendar year in which the tax was underwithheld.
If the withholding agent presumes the payee is a foreign person, the agent must adjust to correct the underwithheld amount credited during the grace period.