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Section 3401 (26 U.S.C. § 3401) of the Internal Revenue Code of the United States of America gives the definitions pertaining to Wage Withholding. These definitions provide guidelines to help IRS employees and Taxpayers in understanding the Internal Revenue Code. IRS regulation 3401 defines the terms used in regard to wage withholding only.
Tax withholding, also known as tax retention, pay-as-you-earn tax or tax deduction at source, is income tax paid to the government by the payer of the income rather than by the recipient of the income. The tax is thus withheld or deducted from the income due to the recipient.
Withholding of tax on wages includes income tax, social security and medicare, and a few taxes in some states. Certain minimum amounts of wage income are not subject to income tax withholding. Wage withholding is based on wages actually paid and employee declarations on federal and state Forms W-4. Social Security tax withholding terminates ...
The W-4 form is an Employee’s Withholding Allowance Certificate designed to let your employer know how much of your income to withhold for federal taxes.
A withholding allowance was like an exemption from paying a certain amount of income tax. So when you claimed an allowance, you would essentially be telling your employer (and the government) that ...
Federal income tax withholding is not a flat rate and is based on your individual circumstances. The best way to figure out the correct amount for your employer to withhold is to complete a ...
Tax may be withheld from payments of income (e.g., withholding of tax from wages). To the extent taxes are not covered by withholdings, taxpayers must make estimated tax payments, generally quarterly. Tax returns are subject to review and adjustment by taxing authorities, though far fewer than all returns are reviewed.
Employers are required by law to deduct from wages, commonly termed "withhold", income taxes, social contributions and for other purposes, which are then paid directly to tax authorities, social security authority, etc., on behalf of the employee. Garnishment is a court ordered withholding from wages to pay a debt.