Civic · 6 pages · 12 min
How withholding is a timing
Withholding sends income tax in during the year, and the return later reconciles that schedule with the tax.
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From the opening
Withholding is a schedule for paying income tax while wages are earned, with the payer remitting amounts through the year. It does not create a second tax beside the income tax, and it does not finally measure the year's liability, which is computed afterward from the full return. The opening covers paychecks carry an estimate of tax, the return does the reconciliation, and estimates cover income without an employer.
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Inside
- Paychecks carry an estimate of tax
- The return does the reconciliation
- Estimates cover income without an employer
- A larger withholding is not a new tax
- Where the idea stops applying
- A distinction worth keeping
Sources
- Wage withholding
- Annual income tax reconciliation