What happens to the money that your employer withholds from your paycheck?

Question

A.
Your employer holds it in case you damage any property.

B.
Your employer holds it until you leave your job and then returns it to you.

C.
Your employer sends it to the federal government to help pay your income tax bill.

D.
Your employer returns it to you at the end of the year so that you can pay your federal taxes.

Answer 1

The correct answer is:

C. Your employer sends it to the federal government to help pay your income tax bill.

When your employer withholds money from your paycheck, it typically includes federal income tax, Social Security tax, and Medicare tax, among other deductions. This withheld money is sent to the government on your behalf to cover your anticipated tax obligations.