Return preparers should review all Forms W-2, Wage and Tax Statement, for clients whose wages and/or self-employment income from all sources for the year are near or over those thresholds to check for under- or overwithholding
and make the appropriate adjustments on the return.
The backup withholding system requires a payor to deduct and withhold income tax from reportable payments--such as interest or dividends--at a 32-percent rate, which may result in overwithholding
if the income is actually taxed at a lower rate.
on wages and salaries tends to offset most of this shortfall from the liabilities on nonwithheld taxable income, and the net difference between total payments and total liabilities is smaller than the difference that would be expected by an examination of either withheld income taxes or nonwithheld income taxes.
may result when wages vary widely within the year and are therefore subject to varying withholding rates.
is built into the withholding tables used by employers; however, as discussed later, new withholding tables introduced in 1992 reduced the extent of overwithholding
is built into the withholding tables that are issued by, IRS and that are used by employers to calculate amounts to be withheld on wages and salaries (the withholding tables introduced in 1992, reduced the extent of overwithholding
If the foreign charitable organization was subject to overwithholding
due to incomplete documentation, it may wish to file a U.
Although no mechanisms are explicitly suggested in the protocol for dealing with such refunds, experiences with similar provisions in past protocols suggest that taxpayers may need to file actual tax returns with the other country's authorities to claim a refund of the overwithholding
based on the new protocol provisions.
On a quarterly basis, personal income tax payments increased little in the first and second quarters of 1983, reflecting large refunds as a result of overwithholding
Payments were unchanged in the first half, reflecting large refunds in early 1982 as a result of overwithholding
and overpayment of federal income tax.
Allowing the out-of-state tax obligations to be satisfied by the withholding of 7 percent of royalties by in-state franchisees reduces the control of a franchisor over its tax liability and has the potential to lead to significant overwithholding