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Backup Withholding Form: What You Should Know

Exemptions Are Not Necessary Backup withholding does not have to be  Exemptions Are Not Necessary Backup withholding does not have to be  Backup withholding is only effective to the extent that the payer reports it. What are the rules? If the investor fails to report the required backup withholding, backup withholding can be applied. Backup withholding is a tax that is levied on income which has been earned and withdrawn. As the investor withdraws the income, it is then reported to the payer by the payer. Backup withholding is imposed by the Internal Revenue Code, and the IRS has the authority to impose this tax as a requirement. The backup withholding provision provides an additional source of income tax for the payer if the payer fails to collect the required backup withholding. Backup withholding is a tax imposed by the Internal Revenue Code and the IRS. The backup withholding provision provides an additional source of income tax when the payer fails to collect the required backup withholding. The backup withholding requirement should be reported in Box 5 of Form W-9 using Form 945, or reported to the payer on Form W-2 using Schedule SE. Generally, backup withholding can be imposed only on income earned more than 60 days before the date the Form W-9, Schedule SE, or Schedule SE-F is filed. However, the IRS allows backup withholding to be imposed only on income earned or received during the 60 days immediately before the date the Form W-9 or Schedule SE was filed to the extent the income relates to an amount to which this paragraph applies. The 60-Day Period In general, an investor, or entity required to withhold backup withholding, must withhold such backup withholding: the  Taxpayers, as determined by the IRS, are required to withhold all taxes and interest on payments not subject to backup withholding. For example, if you withhold one-half of the backup withholding for any payment made to the United States government, the United States government gets the other half. Where the payment is made outside the United States, you report the backup withholding separately from the tax withheld under the general withholding rules. How Do Other Countries Receive Backup Withholding? To the extent backup withholding is imposed, the payer must include the backup withholding in the income reporting to the government.

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Video instructions and help with filling out and completing Backup Withholding

Instructions and Help about Backup Withholding

Good day ladies and gentlemen and welcome to today's webcast entitled IRS backup withholding when and why to submit a question or comment at any time during the webcast please click on the prfeedback button on the bottom of your screen at this time it is my pleasure to turn the floor over to today's host lori stiver ma'am the floor is yours thank you I'm Lori stever and co-presenting with me today is Pat ragas today the office of federal state and local governments or FS LG is bringing you backup withholding when and why Pat and I are both internal revenue agents and specialists with FS LG now before we begin we have several important announcements to share with you the information contained in this presentation is current as of the date it was presented and should not be considered official guidance this program is being recorded and will be maintained in accordance with federal record-keeping laws it will be archived for later viewing on our website at IRS videos gov click on the government's tab and then employers found along the left ribbon although we will not be taking questions during this event we do want to hear from you if something in the presentation prompts a question click on the prfeedback link on your screen your questions help us determine future topics and help us to keep updated information available for you at irs.gov many of them will be cited on our slides today now Pat we'll begin our presentation Thank You Lori Internal Revenue Code section 3406 provides that you may be required to withhold a specific percentage currently 28 percent of certain reportable payments this is backup withholding you must file an information return for those payments and furnish a copy to the payment...

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FAQ - Backup Withholding

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