Federal Income Tax Withholding

Federal income tax withholding is the process where your employer deducts a portion of your paycheck regularly to cover your federal tax obligations. This prepayment system ensures that throughout the year, taxes owed are gradually paid rather than paid all at once during tax season. The amount withheld depends on your income, filing status, and allowances claimed on your W-4 form. At year's end, your total withholding is compared to your actual tax liability, and you'll either get a refund or owe additional taxes. It's a way to manage your tax payments smoothly and avoid surprises later.