Withholding and Estimated Tax

Withholding is the tax collected during the year from income payments, most commonly from wages through payroll.

Estimated tax is tax paid directly during the year in periodic installments when withholding alone is not expected to cover enough tax.

Federal income tax withholding is the portion of tax withheld from paychecks or other payments and sent toward the taxpayer's federal income tax bill.

Backup withholding is tax withheld from certain nonwage payments when tax identification or certification issues make ordinary reporting unreliable.

The underpayment penalty is a penalty that can apply when a taxpayer does not prepay enough tax during the year through withholding, estimated payments, or both.

Terms for paying tax during the year through paycheck withholding or periodic estimated payments.