Question

Jeffery asks his employer to take out money out of every paycheck for future tax filings. Because Jeffery has a wife and two kids, he sets aside a different amount than his colleague Melinda who is single with no dependents. What process are Jeffery and Melinda both using when they ask their employer to take out this money?

Answer 1

Answer: d. withholding

Explanation:

This method is known as withholding tax. With this type of tax, the employee allows the employer to deduct taxes directly from the employee's pay and pay it to the government.

This removes the hassle of having to do so from the employee however, if too little tax is withheld, the employee will have to pay an additional tax which is why the employee still needs to take note of the amount paid.