Federal income tax withholdings payable

Federal income tax withholdings payable is a general ledger account in which is stored the liability for paying to the federal government all income taxes withheld from employee pay.  This is classified as a current liability, since it is typically due for payment within a few days. A business that outsources its payroll processing does not need this account, since the supplier simply extracts from the company’s bank account a lump sum for all payroll taxes and withholdings at one time.

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The Balance Sheet