Managing a business small, medium or big requires you to pay your taxes, as well as your employees taxes. Managing a payroll can be an arduous and taxing job, no pun intended. There are laws that require us to pay taxes and everyone have to comply with that. But keeping up with the payroll can give many people sleepless nights. There are so many deductions needed to be done and they have to be exact to avoid confusion and complications later on. State and federal taxes are very strict and you don't want the IRS pounding on your door because of some mistakes. Make sure that you do your calculations correctly to avoid a mess later on. Keep your payroll records and tax payments as your reference so you have proof of the deductions and payments you have done. Different states have different laws about records; check it out with your lawyer or accountant to make sure.
So just what are payroll taxes? Payroll taxes are the taxes that every business are required to deduct from the employees salary and pay to the state and the federal government, you are required to do this in behalf of your employees. Aside from withholding state and federal taxes, social security and medicare taxes are deducted also from the salary as required by law. The business on the other hand must match the amount paid for the social security and medicare.
In stating to calculate payroll taxes, each of your employee must complete an IRS form W-4. This form will be used to calculate payroll taxes. In the W-4, you can calculate the amount of the federal income tax, and because most states have income tax structures that are based on the federal taxation system, you may also use this form to calculate the state tax to be deducted from the salary of your employees. Also needed to calculate payroll taxes are the percentage currently used for the social security and medicare. Both the employer and employee split the amount needed to be paid. Whatever is deducted from the employee to pay the social security and medicare taxes, the employer must match that amount.
Aside from those, the law requires the employer to pay federal and state unemployment tax; this is part of the payroll taxes. Federal and State unemployment taxes (FUTA and SUTA) are based on the amount of unemployment claims that are filed by employees that you have released or fired. FUTA rates are the same for all state, while SUTA rates will differ from state to state. If your employee earns more than seven thousand dollars per annum, you do not have to pay those taxes anymore.
For some business owners, doing the payroll and to calculate payroll taxes just gets in the way of the day to day business he or she has to do. That's why some proprietors get payroll services to do the dirty work for them. But this means more expenses for the company. While for some this is worth the money, small businesses with a small labor force should just do their own payroll. What they get is the luxury of concentrating more on their business without the need to worry about how to calculate payroll taxes. Just remember, always obey the laws so that you do not complicate matters which could end up to losing the business.
Online entrepreneur Sara Jenkins, is dedicated to helping others and their needs to succeed in life by offering free payroll tips everyday. To learn more about her free roofing tips, and to sign up for her FREE Roofing articles and FREE bonus how-to books and resources, visit http://www.RoofingUp.com
Statistics for IndividualsUnfortunately, the IRS increased its rate of auditing... Read More
As everyone in the U.S. knows, we have just passed... Read More
At the present time a company incorporated in the Isle... Read More
Most people look forward to getting their tax return, but... Read More
Own residential rental properties? This article discusses how income from... Read More
Most people trying to make a crust online (or offline... Read More
The United States is a nation of entrepreneurs. There are... Read More
Does your incorporated business pay alternative minimum tax ["AMT]? If... Read More
Assume a buyer in Pakistan downloads software from the Internet... Read More
As a small business owner, it's wise to familiarize yourself... Read More
If you have recently started an Internet or home business,... Read More
Yes, the tax season is upon with the first filing... Read More
Donating your used car to charity is a win-win situation;... Read More
Does this scene sound familiar? It's April 7. You haven't... Read More
Just image, you are a small manufacturing company, business has... Read More
Someone once said, 'the best way to calculate your taxes... Read More
OverviewIn the Pre-Budget Report of December 2003 the Chancellor Gordon... Read More
It's a moment every person dreads. You pick up the... Read More
Employers often ask employees to designate the amount of tax... Read More
The Internal Revenue Service is reporting that the difference between... Read More
All tax authorities to e-commerce transactions should investigate the record... Read More
You're at your office, or home, and the doorbell rings... Read More
As teachers and students head back to school following a... Read More
No one likes paying tax. Everyone understands that tax is... Read More
If your like many, you don't always understand what people... Read More
Tilting the Tax Laws in Your Favor.In order to accelerate... Read More
In elementary school, kids come up with creative excuses why... Read More
We all love to criticize the IRS, don't we? And... Read More
It's a major fear for most Americans: A notice from... Read More
If you paid someone to care for a child so... Read More
Ever wish that, as a business owner, you knew exactly... Read More
An early distribution from an Individual Retirement Arrangement (IRA) or... Read More
Often people fall on hard times and stop paying on... Read More
If your like many, you don't always understand what people... Read More
Does this scene sound familiar? It's April 7. You haven't... Read More
One can never underestimate the enthusiasm that politicians have for... Read More
One of the most important, but least understood or appreciated... Read More
If your business has employees, you must pay employment taxes.... Read More
As your business grows, you are going to need help.... Read More
NOTE: This is the first in a series of 5... Read More
April 15th looms in front of most people every year... Read More
Should I take wages or dividends from my privately owned... Read More
Own residential rental properties? This article discusses how income from... Read More
As an employer, you must pay employment taxes if you... Read More
Do you realize that some tax forms ask you to... Read More
The end of tax filing extensions is quickly approaching. What... Read More
Q: I was contacted by the city tax collector to... Read More
Many taxpayers are confused about how long they should keep... Read More
So, you were pleasantly surprised to learn that you are... Read More
The Sarbanes-Oxley Act, also called the Public Company Accounting Reform... Read More
As a small business owner, it's wise to familiarize yourself... Read More
According to the IRS, taxpayers underpay their taxes by some... Read More
The means and types of businesses have transformed with advent... Read More
1812The first attempt to impose an income tax on America... Read More
The Internal Revenue Service has certified the 2006 Toyota Highlander... Read More
Yes, the tax season is upon with the first filing... Read More
"Deducting Meals and Entertainment"O.K. You've been working really hard on... Read More
Does your incorporated business pay alternative minimum tax ["AMT]? If... Read More
The United States is a nation of entrepreneurs. There are... Read More
April 15 - The most dreaded day of the year... Read More
While accountants are reaching for aspirin, millions of Americans are... Read More
Excerpted from the new book, "How to Do Space Age... Read More
As a small business owner or self-employed person, one of... Read More
We all love to criticize the IRS, don't we? And... Read More
As a gentleman was leaving my class recently, he wanted... Read More
Running a home based business reaps many wonderful tax deductions... Read More
Tax |