Question

DISCUSSION ACTIVITY In your own words, explain why and how an employee would: • request additional tax deductions at source • apply for a reduction in tax deductions at source

Answer 1

Income tax that is to be deducted from employees are basically depending on the sector of their employment. However, their personal tax liability will be depending upon the area they living. A person working in an organisation as an employee can request additional deductions of tax at source. They may make such a request to fulfill their personal tax libaility if they don't have enough income tax deducted.

Employees can also apply for a reductions in tax deductions at source. Employees may make such a request if their tax deducted is more than that is required. The employees may contributes to retirement savings plan, Child care, donations to charitable institutions etc.. In such a situation the employee can also apply for a reduction in tax deductions at source. Employees may apply to the Reveneue Agency for approval of deductions in tax. If the Revenue Agency approves the process , they will send a letter of authority to the employer giving them the permission to reduce the tax.