Withholding Tax

It’s that amount of money you see on your paycheck that is automatically deducted, and most of the time with much disdain and regret on your part. This is known as “payroll taxation” – or “pay as you earn”. The government mandates a certain percentage of your salary as your contribution for federal programs, records and takes it out before you receive your salary on the appointed date every month. When you file your income tax returns for the year, the IRS then determines if you will get a refund or you would have to pay more depending on the income, deductions and adjustments to be reported in your W-4 form.