Withholding tax

Okay kiddo, let's talk about withholding tax in a way you can understand.

Let's say you have a piggy bank and you love putting your allowance money inside it. But, your parents tell you that every time you put money in, you have to give them a small portion of it. This small portion is like the withholding tax.

The government is like your parents, and every time you receive income like a salary, it's like you're putting money in your piggy bank. The government wants a small portion of this money to help pay for things like schools, hospitals, and roads.

So, when you get a job or start earning money, your employer will automatically take a little bit of your paycheck and send it to the government for taxes. This is called withholding tax because it's taken out or withheld from your paycheck before you even get it.

Just like your piggy bank, sometimes you get to keep more of your money and sometimes you have to give up a little bit of it. It may not seem like a lot, but together, all of the withholding tax adds up and helps our country run smoothly.