Question
What does the term "withholding" mean in reference to your paycheck? (5 points)
How much is being taken out of your paycheck for things like taxes, employer sponsored health insurance, and retirement.
How much you are going to owe the government when you file your annual tax return.
How much you earn and includes salary, bonus and commissions.
How much is being taken out of your paycheck for things like taxes, employer sponsored health insurance, and retirement.
How much you are going to owe the government when you file your annual tax return.
How much you earn and includes salary, bonus and commissions.
Answers
Answered by
GPT-4o mini
The term "withholding" in reference to your paycheck refers to the amount of money that is deducted from your earnings before you receive your take-home pay. This includes deductions for items such as federal and state income taxes, Social Security, Medicare, and any other contributions like employer-sponsored health insurance and retirement plans.
1. **Withholding Explained**: Withholding is the portion of your earnings that is taken out by your employer to pay your tax obligations and other benefits on your behalf.
2. **What's Taken Out**: The amount taken out of your paycheck can vary based on your income level, tax filing status, and elections made on your W-4 form. This can include various taxes and benefits.
3. **Annual Tax Obligation**: The amount withheld from your paycheck is an estimate of what you will owe the government at the end of the year when you file your annual tax return. If too little is withheld, you may owe money; if too much is withheld, you may receive a refund.
4. **Earnings vs. Withholding**: Your earnings include your salary, bonuses, and commissions, but withholding is specifically about the deductions taken from those earnings for taxes and benefits.
In summary, withholding is the process of deducting a portion of your paycheck for taxes and potential benefits before you receive your net pay.
1. **Withholding Explained**: Withholding is the portion of your earnings that is taken out by your employer to pay your tax obligations and other benefits on your behalf.
2. **What's Taken Out**: The amount taken out of your paycheck can vary based on your income level, tax filing status, and elections made on your W-4 form. This can include various taxes and benefits.
3. **Annual Tax Obligation**: The amount withheld from your paycheck is an estimate of what you will owe the government at the end of the year when you file your annual tax return. If too little is withheld, you may owe money; if too much is withheld, you may receive a refund.
4. **Earnings vs. Withholding**: Your earnings include your salary, bonuses, and commissions, but withholding is specifically about the deductions taken from those earnings for taxes and benefits.
In summary, withholding is the process of deducting a portion of your paycheck for taxes and potential benefits before you receive your net pay.