Back-Up Withholding

Business / Taxes / Back-Up Withholding: Back-up withholding is triggered when a bank, brokerage firm, or other institution pays interest, dividends, or other income that must be reported on IRS Form 1099 to a payee who does not provide a tax identification number (TIN), typically a Social Security number, or provides an incorrect number. While income that’s reported on Form 1099 is not normally subject to withholding, in this instance, the payer must withhold 28% of the gross amount as income tax. You can avoid back-up withholding in most cases by providing a correct TIN using IRS form W-9. But if the IRS determines you have underreported your investment income, it may require back-up withholding even if the payer has your TIN.

Withholding Tax

Business / Finance / Withholding Tax: Used in the context of securities, the illegal practice of a public offering participant keeping some shares in a private account or with a family member, employee, or dealer to profit from the higher MORE

Withholding

Business / Finance / Withholding: Agreement that a mutual fund will disburse automatic periodic redemptions to the investor. MORE

Underwithholding

Business / Finance / Underwithholding: A stock price perceived to be too low or cheap, as indicated by a particular valuation model. For instance, some might consider a particular company's stock price cheap if the company's price-earnings MORE

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