what is fitw tax

Federal Income Tax Withholding (FITW) refers to the federal income tax that is withheld from wages at the time of payment. It is the amount of money taken from an employees wages to cover federal income taxes. Employers use the information provided on the employees Form W-4, the amount of the employee’s taxable earnings, and the frequency the employee is paid to determine the amount of federal income tax to withhold from each paycheck. The total FITW for the year will be reported on the employees Form W-2 in box 2. If an employee is not withholding enough federal tax, they can adjust their withholding using Form W-4. FITW is an essential component of an employees paycheck taxes, and it is crucial for individuals to understand how it works to ensure they are meeting their federal income tax obligations.