Question:

What are some payroll taxes?

Business Payroll Taxes

If you operate a business and have any employees, you are required by the IRS to withhold payroll taxes from their paychecks. Payroll taxes that you will be withholding are at both the state (if applicable) and federal levels. For state income taxes withheld, the rate you use will be determined by your applicable state tax reporting laws. For federal income taxes, these rates are determined by the IRS.

Here are some of the payroll taxes you are required to withhold and submit (pay) to the applicable governments, along with their applicable tax forms:

FICA – Federal Insurance Contributions Act. This category is the combination of both the employer's share and the employee's withheld share of social security and Medicare taxes.

Federal – Federal income tax will be withheld from your employee's paycheck based upon their claimed exemptions (IRS Form W-4) and any additional withholding amounts (if any). The federal withholding amount is in addition to the FICA amount mentioned above.

Payroll tax deposit. Each month (or sooner depending on your payroll situation) you will make a payroll tax deposit. This deposit figure will be a consist of the FICA figure mentioned above. Information on calculating the amount will be found in the IRS Circular E. You will use IRS Form 8109-B (Federal Tax Deposit Coupon) for this purpose.

Quarterly. Form 941. You will report these payroll taxes (FICA and federal withholding) on a quarterly basis by filing IRS Form 941. Information contained on the Form 941 include total wages, wages per month, employees per month, payroll tax deposits made, and any tax due amount. If you calculated your payroll tax deposits correctly, there will be little or no taxes due to the IRS when you file this form.

941 – Payment Voucher. This is the IRS Form you use to pay your quarterly tax amount due (if any).

State – If the state in which you operate a business in has a state income tax, you need to withhold this percentage from your employee's paycheck.

Other payroll related taxes you are required to pay (but not withhold from your employees checks) include:

FUTA – Federal Unemployment tax. This payroll related tax is paid on an annual basis by using IRS Form 940 (Annual Federal Unemployment Tax Return). This tax is paid in full, one lump sum.

Alternative: There is a shorter version of the IRS Form 940 available to you if certain conditions/situations are met. You can use IRS Form 940-EZ if any of these conditions are met:

  • All your FUTA taxes paid were the same amount
  • Your business only pays FUTA to one state
  • Your state unemployment taxes were paid in full by January 31, 2007
  • You did not hire a household employee to work in your private home (domestic help) for the entire tax year
W-2. Wage & Tax Statement. This is the IRS tax form that reports the wages paid to employees. It also includes the amounts withheld for federal income taxes, state income taxes (if any), along with other needed tax information You are required by the IRS to mail this form to your employees by January 31, 2007.

W-4. Employee's Withholding Allowance Certificate. This is one of the required tax forms you will have your employees fill out. It can be changed at any time by the employee. Your employee will use this form to claim their withholding allowances. In turn, you will use the withholding allowance to calculate your payroll withholding figures along with employee's paychecks.

I-9. Employment Eligibility Verification. This form is used to verify, or proof, the legality of your employee to work in the United S

Tax Relief Frequently Asked Questions

What is one IRS Penalty?

Is there a penalty for not reporting my social security number?

What is the IRS penalty for not filing my tax return?

What is a frivolous return?

Is there a penalty for paying taxes late?

What is an example of a tax evasion case?

What is tax fraud?

What is tax evasion?

What is innocent spouse relief?

Can I see an example of innocent spouse relief?

When does innocent spouse relief not apply?

What form do I need to request innocent spouse relief?

How can I appeal an innocent spouse relief?

What are some innocent spouse relief rules?

Am I eligible for innocent spouse relief?

Where do I mail my IRS Form 8857?

What is corporate tax evasion?

What are some payroll taxes?

How about an actual case about corporate tax evasion?

What are some fringe benefits?

What is tax relief from a tax loss?

How can state taxes paid provide tax relief?

What is some small business tax relief?

What happens with unpaid payroll taxes?

What is an automatic IRS installment plan?

What are some documents needed for payment plans?

What is the drawback to an IRS installment plan?

What if I fall behind in my tax payments?

How can I make payments on my IRS payment plan?

What form do I need for requesting an IRS installment plan?

How do I request an IRS Payment plan?

What is an IRS tax installment agreement?

What are the guidelines for applying for an OIC?

Be weary of what?

Are there examples of OIC case studies?

How do I calculate my OIC offer?

When can I apply for an OIC?

What is an offer in compromise?

What are the procedures for an OIC?

What is an uncollectible account?

What are back property taxes?

Where can I get federal tax lien information?

What is a release of federal tax lien?

What is a notice of federal tax lien?

What property can be subject to a tax lien?

What is the tax lien process?

How do I perform a tax lien search?

What is a high risk taxpayer for tax liens?

What is a tax lien?

What assets can be levied?

How do I appeal an IRS levy?

What is a bank levy?

What starts the levy process?

What is a Notice of Levy?

How can I release a tax levy?

What is a state tax levy?

What is the difference between a tax lien and levy?

What is a wage levy?

What are some high risk trigger areas?

What are some IRS audit red flags?

Can I represent myself during an audit?

How long does the IRS have to audit me?

How do I prepare for my IRS audit?

How do I protect myself from an audit?

What is the IRS Taxpayer Bill of Rights?

What are some types of IRS audits?

How do I appeal a wage garnishment?

Can I see a wage garnishment case?

What is a wage garnishment?

What is a IRS warning?

What if I am self-employed?

How do I stop wage garnishment?

How do I release a wage garnishment?

Why do I have a wage garnishment?

What is my responsibility with wage garnishments?

How can an amended return give me tax debt help?

What is bankruptcy?

What is the debt calculator?

What is state tax debt?

What is a tax debt help mistake?

Who is a tax debt pro?

What is the Taxpayer Advocacy Services?

What is an uncollectible category?

What is a back tax form?

How do I file back taxes?

How do I pay back taxes?

What is the IRS statute of limitations?

What if I didn't receive a W-2?

What are the penalties for not filing my return?

What is a special situation regarding back taxes?

What is the IRS statute of limitations for back taxes?

What about the IRS & Substitute Tax Forms?

What is a penalty abatement?

What is an example of a penalty abatement?

What is a reasonable cause for penalty abatement?

How do I request a penalty abatement?

How do I request an interest abatement?

What is a penalty abatement request letter?

What about penalty abatements?

What if I rely on IRS incorrect advice?





Not finding the advice and tips you need on this Tax Relief Tip Site? Request a Tip Now!


Guru Spotlight
Patricia Walters-Fischer