How are Payroll Federal Tax Withholdings Accounted for?

A payroll federal tax withholding is the federal tax that is taken from a payroll check. The amount of the withholding is based on the W-4 that an employee filled out when hired in conjunction with the amount earned. The W-4 takes into account the amount of deductions that will be taken as well as the filing status of the individual.

How Much Is Withheld?

Employers will file a payroll tax return that accounts for all of the withholdings from their employees. The amount that they collect from each employee is taken from federal payroll withholding tables. Each table is different depending on the filing status of the taxpayer.

What Proof Do I Get?

If a company employs an outside service to process payroll, take deductions and cut checks then it is most common for that same company to prepare the payroll tax filings as well. Doing this keeps all records very straightforward and concise. You will receive a copy of all withholdings made and paid to the federal government. You will also receive a year end summary of deductions on a form called a W-2. This form is used for you to file your individual tax returns. There will be a federal tax return copy for you to submit with your filing.

Payroll record keeping is very important in keeping tax records accurate. If withholdings are not made or not accurately reported, it can severely impact an individual’s tax return.