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Explains how a portion of your income is withheld throughout the year by your employer, as required by the Internal Revenue Service (IRS). You may have some flexibility on how much income can be withheld. A psychological advantage of this so-called "withholding tax" is that the funds are pulled from your income before you receive your paycheck.

It is as if that portion of your income was never yours anyway.

It may be even more painful to receive all the income and then have to pay a portion of the income in taxes later. If you have a choice, would you prefer to have a higher or lower amount of income withheld? Explain your opinion.

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