Withholding of Tax
Persons paying wages or making certain payments to foreign persons are required to withhold income tax from such payments. The Social Security tax is one type of withholding tax. Withholding of income tax is also required. Income tax withholding on wages is based on declarations by employees and tables provided by the IRS. Persons paying interest, dividends, royalties, and certain other amounts to foreign persons must also withhold income tax at a flat rate of 30%. This rate may be reduced by a tax treaty. Additional backup withholding provisions apply to some payments of interest or dividends to U.S. persons. The amount of income tax withheld is treated as a payment of tax by the person receiving the payment on which tax was withheld.
Read more about this topic: Income Tax In The United States
Famous quotes containing the words withholding and/or tax:
“When it comes to finances, remember that there are no withholding taxes on the wages of sin.”
—Mae West (1892–1980)
“Parents are used to being made to feel guilty about...their contribution to the population problem, the school tax burden, and declining test scores. They expect to be blamed by teachers and psychologists, if not by police. And they will be blamed by the children themselves. It is hardy a wonder, then, that they withdraw into what used to be called “permissiveness” but is really neglect.”
—C. John Sommerville (20th century)