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 ?
As a first step to reflect the tax law changes, the IRS released new withholding tables in January.
4 billion in income tax in which the share of withholding tax was almost half.
The FIRPTA withholding provisions can be quite complex.
It would help in generating reports on withholding tax collection of Regional Tax Offices and Large Taxpayer Units, withholding tax collection, sectorial withholding tax collection besides producing section wise withholding tax reports.
294, 299 (1993)], and thus, if no return is filed, the statute of limitations for assessment of withholding tax liability against the withholding agent never begins to run [IRC section 6501(c)(3)], Accordingly, a business that has made payments to nonresident aliens during the year, but for which the business has determined that withholding was not required (e.
The withholding agent receives a withholding certificate from the IRS that excuses withholding (Regs.
The tax withholding with respect to shares held by shareholders registered in the company's shareholders' registry the tax withholding from the capital distribution amount shall be made by the company.
Two FEI technical committees, the Committee on Taxation (COT) and the Committee on Government Business (CGB), have worked closely with the Government Withholding Relief Coalition to support the Craig legislation.
Among those identified with the Democratic party, Catholics uniformly opposed withholding treatment from any infant while non-Catholics were likely to favor withholding treatment from some infants.
Instead, payroll tax withholding tables have merely been lowered to remove some of the traditional built-in "padding" which normally results in the large refunds taxpayers have grown accustom to receiving.
The picture that now emerges of what actually occurred during the executive privilege confrontation illustrates that, far from having an ancillary role in the affair, the Justice Department was the central force behind the withholding of the documents.
CHICAGO -- Illinois business taxpayers are the first in the nation to be able to pay state withholding and federal taxes at the same time through a single system, the U.