What does the abbreviation FITW stand for?

The abbreviation FITW stands for Federal Income Tax Withheld. This term refers to the portion of an employee's wages that an employer withholds to pay federal income tax on behalf of the employee. By deducting FITW from an employee's paycheck, employers help ensure that employees fulfill their tax obligations to the federal government throughout the year, instead of waiting until tax season.

It's important to understand that FITW is calculated based on the employee's earnings and the information provided on their W-4 form, which indicates their filing status and any additional withholding allowances claimed. This withholding is a crucial aspect of payroll processes as it contributes toward the employee’s overall tax liability and can prevent a large tax bill when filing their annual tax return.

Other options, while they may include terms related to tax withholdings, do not accurately describe the acronym FITW. Federal Insurance Tax relates to Social Security and Medicare, not income tax. The other terms involving "Independent" and "Inheritance" do not correspond to the acronym at all in the context of payroll processing.