glossary

GLOSSARY

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Withdrawal plan

Withdrawal plan is a service offered by some mutual fund accounts. An individual who signs up for a withdrawal plan will receive periodic income payments out of her account. Withdrawal plans are often used to create a regular stream of retirement income.

Withholding

Withholding is a method of paying taxes, where funds are automatically deducted from wages. Withheld funds are sent directly to the taxing authority, and counted as partial payment towards the individual's tax liability for that year.

Withholding allowance

Withholding allowance is a value that a taxpayer claims on the IRS W-4 Form. The allowance value, in part, determines how much money is withheld from the taxpayer's earnings. A higher allowance means a lesser withholding rate. Typically, a taxpayer can claim one allowance for herself, one for her spouse, and one for each dependent.

Withholding tax

Withholding tax is the amount of money that's taken out of an employee's wages and sent directly to a taxing authority. These withheld amounts count as partial payment toward the taxpayer's tax liability for the year. Withholding tax can also be an assessment charged against a non-resident's investment and income.

Work study

Need-based financial aid award in which the federal government subsidizes part of the cost of a student's wages at a job usually on campus.

Working capital loan

Working capital loan is a short-term debt provided to a business to bridge the gap between buying or manufacturing product and actually receiving customer payments for sold product.

Workout

A mortgage in which basic terms: interest rate, term and monthly payment, have been altered to prevent a foreclosure.

Workout assumption

Workout assumption is the transfer of an existing mortgage from an at-risk borrower to a qualified third-party. A workout assumption is usually only a consideration when a borrower has serious financial problems that aren't likely to be resolved. The lender must approve a workout assumption.

Worm

A worm is a malicious computer program that can replicate and distribute itself via a network. Worms can run themselves, while viruses rely on a host program.

Wraparound loan

A wraparound loan is a refinancing technique used with mortgages. A lender makes a new loan to the homeowner, and places the loan in a subordinate position to the existing first mortgage. After funding (rather than at funding), the borrower uses the proceeds from the new loan to pay off the old first mortgage.

Wraparound mortgage

A consolidation of balances on all mortgages into one loan.

Writ

Writ is a written, binding order issued by a judge, judicial officer or court.

WSJ prime rate

WSJ prime rate is a consensus prime rate published by the Wall Street Journal, which obtains the information via a survey of financial institutions. The prime rate is a benchmark lending rate that generally remains 3 percentage points higher than the fed funds rate.