Withholding tax is deposited for which of the following entities?

Withholding tax refers to the income tax that an employer deducts from employees' wages and then remits directly to the government on behalf of the employees. It is a system in place to collect income tax in a timely manner, preventing large tax bills from accumulating for workers at the end of the tax year.

In this context, the answer is correct because the government is the entity that ultimately receives these withheld funds. The employer acts as an intermediary, deducting the appropriate amount from employees' paychecks and ensuring that it is sent to the government. This helps streamline the process of tax collection and ensures compliance with tax obligations.

The other entities listed, such as insurance companies, local governments, and retirement funds, do not directly receive withholding taxes in the same manner. Insurance companies and retirement funds may have different tax structures and obligations, while local governments are typically not the recipients of federal income tax withholdings. Thus, the correct answer highlights the role of the government as the entity that benefits from the withholding tax process.