Title: Explain the purposes of payroll withholdings/deductions.
Course: Accounting (12104-I) > Section: Implementing Payroll and Payroll Tax Procedures

Explanation should include the following:

- Withholdings are deductions from pay for such purposes as federal and state income taxes and Social Security and Medicare (FICA) taxes.
- Withholdings may be voluntary (e.g., for health insurance [health savings account], IRA [Roth and traditional], other retirement plans), or involuntary (e.g., for child support, garnishments, or tax liens).
- Withholding allowances for federal and state income taxes are affected largely by marital status and exemptions, as reported on W-4 (Employee's Withholding Certificate) and VA-4 (Employee's Virginia Income Tax Withholding Exemption Certificate) forms.