| If you have employees, you are responsible | | | | the IRS. The amounts reported on the 941 |
| for payroll taxes. This is a term that lumps | | | | should reconcile to the amounts turned in |
| all the different forms of employment taxes | | | | each month via the tax coupon or the EFTPS. |
| into one category known as "payroll tax". In | | | | At the end of the tax year, a Form 940 or |
| reality, payroll taxes encompass Federal and | | | | information return must also be filed. |
| state income tax withholding, social security | | | | |
| and Medicare taxes (also known as FICA), | | | | If you are a small business with employees, |
| Federal unemployment tax (FUTA), as well as | | | | or you plan to begin operating a business |
| any state and local unemployment taxes | | | | with employees, you need to understand your |
| assessed. Payroll taxes are deducted each | | | | tax responsibilities as an employer. The IRS |
| pay period from an employees gross pay. The | | | | provides links to all the relevant Forms and |
| remaining money distributed to the employee | | | | Publications via their internet site at . |
| is what is known as "net pay". Along with | | | | Here you will find definitions and terms |
| any taxes deducted from an employee's wages, | | | | associated with employees from the onset of |
| there is a social security and Medicare | | | | hiring, to termination. W-4's, W-2's, I-9's, |
| liability incurred by the employer. You must | | | | all the employment taxes you will be |
| match the social security and Medicare | | | | responsible for reporting, all the rates |
| amounts withheld on each employee. This is | | | | associated with those taxes. The IRS also |
| the employer paid contribution. Until | | | | provides you with information concerning |
| recently, most employers reported and paid | | | | recordkeeping, employment eligibility |
| payroll taxes quarterly. With the advent of | | | | verification, benefit and retirement plans, |
| the EFTPS, or Electronic Federal Tax Deposit | | | | and even the definition to be used in order |
| System, taxes are now paid on a monthly basis | | | | to determine if someone is an employee. |
| by all employers. The payroll taxes may also | | | | There is a tremendous benefit to be had by |
| be paid via a tax coupon that is taken to | | | | investing the time and resources necessary to |
| your bank and presented with the monies to | | | | understand and comply with all the federal, |
| cover the payroll taxes due. | | | | state, and local regulations concerned with |
| | | | employees and payroll taxes. However, you |
| Every quarter, a Form 941 (or 943 for | | | | should frequently seek the advice of a |
| Agricultural employees) must be filed with | | | | qualified tax professional, your accountant. |