Reserve withholdings are funds set aside for tax purposes on withdrawn investment income.
The backup withholding is used by the IRS to make sure it collects taxes on income that an investor may have already spent before their tax bill expires.
A 24% backup withholding may be applied to taxpayers who misreport their taxpayer identification number (TIN) or fail to report certain types of income.
Some payments subject to backup withholding include interest, dividends and rent.
Retirement and unemployment benefits are exempt from backup withholding.
The Electronic Federal Tax Payment System (EFTPS) is a 24/7 service provided by the US Department of the Treasury that allows taxpayers to make tax payments over the phone or the Internet.
Form 1095-B: Health insurance contains health insurance information for taxpayers, their spouses, and dependents if they are enrolled through an insurance company.
Form 1099-R is used to report distributions of annuities, income distribution plans, retirement plans, retirement accounts, insurance contracts, or pensions.
Form 2439 is an IRS form that regulated investment companies (RICs)—mutual funds and exchange-traded funds—and real estate investment trusts (REITs) are required to circulate to shareholders to report unallocated long-term capital gains.