Thursday, December 15, 2011

What is federal withholding?

In my saving account there is a transaction called "Federal Withholding" occurring every month. It occurs on the same date with the transaction called "Interest Earned", which is shown every month too. So what is Federal Withholding? Is it tax? Can I get back those money or is it mandatory?|||That is federal income tax withholding, the same thing that happens with your paycheck. Most bank account holders are not subject to withholding. Talk to your bank's customer service, because something is not set-up correctly with your account.|||This is federal income tax withheld from your interest income, just like federal income tax is withheld from your paycheck. When you file your federal income tax return, this withholding is reported, again just like the withholding from your paycheck. If you have more in total withholdings than you owe in taxes, you will get a refund.





In most circumstances you can have this federal withholding stopped by giving the bank your social security number. Give your bank a call and ask what you need to do to have the federal withholding stopped.

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