TDS stands for Tax Deducted at Source, so quite simply it's the tax that an employee also known as the deductee has to pay. The employer, also known as the deductor, deducts money from the employee's salary and withholds it until the money is due to be paid to the US Treasury. As an employee there is nothing you need to do, the employer will do this for you.
Employees have to trust their employer to make these payments. There is of course always a risk that the employer breaks this trust and fails to pay. Although the employer will face court, it still remains the employee's responsibilities for paying their own tax, even though it was the employer that took the funds. This method is used in many countries, including the US.
It's not just employees that are subjected to TDS. Other sources of incomes, such as interest, dividends, winnings from lotteries, commission and brokerage, rent, fees for professional and technical services and more are also subjected to TDS.
However, if you are self employed you are solely responsible for paying your own taxes. You will need to submit estimated tax payments to the Internal Revenue Service (IRS). You will also have to pay Social Security and Medicare tax. It is a good idea to keep on top of this and put money away in readiness so that you are prepared for the bill. If you are thinking of starting up a business then you need to be clued up on this first. There is plenty of help on the internet and plenty of books to help. It may be worth purchasing some software on bookkeeping, have a look online there may even be some free downloads.
Employees have to trust their employer to make these payments. There is of course always a risk that the employer breaks this trust and fails to pay. Although the employer will face court, it still remains the employee's responsibilities for paying their own tax, even though it was the employer that took the funds. This method is used in many countries, including the US.
It's not just employees that are subjected to TDS. Other sources of incomes, such as interest, dividends, winnings from lotteries, commission and brokerage, rent, fees for professional and technical services and more are also subjected to TDS.
However, if you are self employed you are solely responsible for paying your own taxes. You will need to submit estimated tax payments to the Internal Revenue Service (IRS). You will also have to pay Social Security and Medicare tax. It is a good idea to keep on top of this and put money away in readiness so that you are prepared for the bill. If you are thinking of starting up a business then you need to be clued up on this first. There is plenty of help on the internet and plenty of books to help. It may be worth purchasing some software on bookkeeping, have a look online there may even be some free downloads.