A set amount that taxpayers can claim for themselves, their spouses, and eligible dependents that is subtracted from adjusted gross income before any tax is figured on the remaining income. The amount is determined from the employee's W-4. The U.S. income tax system is built on the idea of voluntary compliance . This means that it is left to the taxpayer to keep the necessary records, file a return on time, pay any required taxes, and meet the requirements of the tax law. The system is built on trust in citizens to know their responsibilities and to do what needs to be done.
Most taxpayers withhold money monthly to cover their tax liability.
Without tax withholding many people would find it difficult to save enough money to pay their income taxes all at once. The government depends on an uninterrupted flow of revenues to avoid a possible disruption in government services. As taxpayers, it is important for all of us to understand that we are responsible for paying income taxes by withholding income as it is earned, and we voluntarily report our income to the IRS by filing a tax return. Thriving is published monthly for 3,000 Central Missouri families. We welcome your feedback.