If you have employees, you are responsible for paying a variety of taxes at the federal, state, and local levels. You must also withhold certain taxes from the paychecks of your employees. So, what are employment taxes?
Employment taxes include the following.
1. Federal income tax withholding
2. Social Security and Medicare taxes
3. Federal unemployment tax (FUTA).
Federal Income Taxes/Social Security and Medicare Taxes
You generally must withhold federal income tax from wages paid to an employee. Form W-4 is used to determine the specific amount, although most payroll services or your accountant will do this for you.
Social security and Medicare taxes pay for benefits that workers and families receive under the Federal Insurance Contributions Act (FICA). Social security tax pays for benefits for the retired, survivors, and disability insurance distribution provisions of FICA. Medicare tax pays for benefits under the medical care provisions of FICA. As an employer, you must withhold a percentage of these taxes from employee and match the withholding amount.
In general, you must deposit these taxes by check or cash to an authorized financial institution, typically your bank. Check with your tax professional to make sure you are not required to use the Electronic Federal Tax Deposit System (EFTPS). Regardless of the payment method, you will then report them on Form 941, the Employer's Quarterly Federal Tax Return
Federal Unemployment Tax (FUTA)
FUTA is a combined federal and state program that provides unemployment compensation to the unemployed. As a business owner, you are solely responsible for paying this tax, to wit, nothing is withheld from the paychecks of your employees. FUTA is determined by using Form 940, but you are encouraged to use a tax professional to determine payment amounts.
Employment taxes can be frustrating for a small business owner. They are, unfortunately, a necessary evil as your business grows.
Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.
|
|
|
|
|
|
|
|
|
|
|


In a past article I relayed the plight of the... Read More
Someone once said, 'the best way to calculate your taxes... Read More
If you paid someone to care for a child so... Read More
Marketing is a necessary expense in running practically any business... Read More
The Internal Revenue Service is reporting that the difference between... Read More
Knock-Knock-KnockWho's there?The IRS!The next quarterly payment of estimated income tax... Read More
Are you in the middle of a disagreement with the... Read More
Newlyweds and the recently divorced should make sure that names... Read More
If you are a Small Business Owner or Self-Employed Person,... Read More
Excerpted from the new book, "How to Do Space Age... Read More
The knock on the door from a Tax Inspector is... Read More
On June 3, 2005, the IRS released guidance on charitable... Read More
Often people fall on hard times and stop paying on... Read More
The means and types of businesses have transformed with advent... Read More
IRS Tax forms can be confusing.Am I a 1099 or... Read More
Strategic planning throughout the year results in a minimal tax... Read More
Just image, you are a small manufacturing company, business has... Read More
Reservists called to active duty and enlistees in the armed... Read More
It may not be high on the list of wedding... Read More
If you have recently started an Internet or home business,... Read More
"Depreciation." For business owners, this word is the one most... Read More
Recently, I stumbled across a concept that could change your... Read More
Deduction of Refinance PointsAny points that you pay in the... Read More
NOTE: This is the first in a series of 5... Read More
As a gentleman was leaving my class recently, he wanted... Read More
Statistics for IndividualsUnfortunately, the IRS increased its rate of auditing... Read More
While there are many equally valid reasons to incorporate, saving... Read More
As a small business owner or self-employed person, one of... Read More
Beware of advertisements that claim to settle tax debts for... Read More
Whether helping the kids with a down payment on their... Read More
It's a major fear for most Americans: A notice from... Read More
In the latest Star Wars episode, the evil empire executes... Read More
We all love to criticize the IRS, don't we? And... Read More


Q: I was contacted by the city tax collector to... Read More
It's a major fear for most Americans: A notice from... Read More
Excerpted from the new book, "How to Do Space Age... Read More
Adding Your First Additional Stream of IncomeMost new wealth builders... Read More
Employers often ask employees to designate the amount of tax... Read More
Misconceptions, misinterpretations and just plain "untruths" are floating about income... Read More
The powers of Congress, and the limitations set upon those... Read More
IRS Tax forms can be confusing.Am I a 1099 or... Read More
If you are a Small Business Owner or Self-Employed Person,... Read More
In the latest Star Wars episode, the evil empire executes... Read More
At the present time a company incorporated in the Isle... Read More
You've been feeling uneasy (perhaps even guilty) because you've failed... Read More
Knock-Knock-KnockWho's there?The IRS!The next quarterly payment of estimated income tax... Read More
How Home-Based Businesses Can Avoid Giving Uncle Sam... Read More
In a past article I relayed the plight of the... Read More
It's that time again, the April 15 tax deadline is... Read More
In the largest criminal tax case ever filed, KMPG has... Read More
Background issues of access to recordsTo assess the records at... Read More
We all love to criticize the IRS, don't we? And... Read More
Import duties continue to be significant elements in the cost... Read More
While accountants are reaching for aspirin, millions of Americans are... Read More
Choosing the right tax preparer for your business is a... Read More
Taxpayers have two easy and convenient options for getting copies... Read More
The means and types of businesses have transformed with advent... Read More
Most people look forward to getting their tax return, but... Read More
All tax authorities to e-commerce transactions should investigate the record... Read More
The knock on the door from a Tax Inspector is... Read More
In elementary school, kids come up with creative excuses why... Read More
Reservists called to active duty and enlistees in the armed... Read More
Beware of advertisements that claim to settle tax debts for... Read More
Most people trying to make a crust online (or offline... Read More
According to the IRS, taxpayers underpay their taxes by some... Read More
If your like many, you don't always understand what people... Read More
Tax |