What is backup withholding?
Backup withholding is a tax withholding mechanism that is used to ensure that tax is paid on certain types of payments, including interest, dividends, and rents. Backup withholding can be used to ensure that tax is paid on payments to foreign persons, payments made in settlement of a debt, and payments of gambling winnings.
How does backup withholding work?
Backup withholding works by requiring the payer of a taxable payment to withhold a percentage of that …
