Why withholding taxes

States use money to pay for a variety of services: schools and universities, care of poor and disabled people, running parks and campgrounds, protecting wildlife, prisons, courts, health services, highway and bridge maintenance are all types of services that are supported by taxes. These services are more than the average citizen could provide for themselves.

Source of Government Money

States raise money by taking money from citizens to pay for part or all of the cost of the services they provide. Some states use income taxes as a source of tax revenue, which spreads the cost among all citizens who work in the state.

Withholding

Each time an employer pays you, they take some of the money you earned to send to the state, so when taxpaying time comes, you will likely not have to come up with a huge sum of money.

Withholding formula

The states provide your employer with a schedule of how much to withhold from each paycheck. The schedule assumes that at each hourly or weekly amount, you will owe a certain percentage to the state.

If you are self-employed

If you are self-employed, you need to do the calculations yourself and make quarterly payments to the state.

Source:

Small business Tool Kit

Resource:

Get State Tax Forms