Why does the federal government collect income taxes in installments rather than waiting until the end of the year?

Question

It is easier for taxpayers to pay that way, but inconvenient for the government.

It is easier for the government to collect that way, but harder for taxpayers.

It is optional; people may pay all their taxes at once at the end of the year.

It is more convenient for the government and taxpayers to collect in installments.

Answer 1

The correct answer is:

It is more convenient for the government and taxpayers to collect in installments.

This system, known as withholding, allows the government to receive tax revenue throughout the year, which helps to fund public services and obligations. For taxpayers, paying in installments can make it easier to manage their finances, as it spreads the tax burden over the year rather than requiring a large payment at once.