What does "backup withholding "mean?On my account application it says that to say that I am either subject

Question

to backup withholding,or that I am exampt from backupwithholding.I di put my correct Tax payer Id # on the application,Any ideas,suggestions?

Answer 1

If you don't know, you aren't.

Answer 2

Typically the information requested appears on IRS form W-9.  If you fail to provide the information or it turns out to be incorrect, then the company must withhold 28%  from any payment, that way the IRS gets their money.  Being exempt from tax, you are saying you are not subject to tax.

Answer 3

Exempt means you haven't gotten a letter from the IRS stating that you must be subject to backup withholding.

This happens when you don't file or file and don't report all of your income.