Question

A tax _______ includes income taxes withheld from a taxpayer's salary by an employer, estimated tax payments paid directly to the IRS, and amounts from a prior year overpayment that were applied to the current year's tax liability.

Answer 1

A tax withholding includes various types of pre-paid taxes such as income taxes withheld by employers, estimated tax payments to the IRS, and prior year overpayments applied to the current year's taxes.

Step-by-step explanation:

A tax withholding includes income taxes withheld from a taxpayer's salary by an employer, estimated tax payments paid directly to the IRS, and amounts from a prior year overpayment that were applied to the current year's tax liability. These withholdings are part of what is known as the payroll tax and are meant to cover the taxpayer's annual tax obligations in advance. Payroll taxes include deductions from an employee's wages for income tax, social security contributions, and various insurances such as unemployment and disability. At the end of the tax year, taxpayers must complete their paperwork, such as the 1040EZ or a more detailed form, to verify their adjusted gross income and ensure that the correct amount has been withheld.