![]() ![]() ![]() In general, employers who withhold federal income tax, social security or Medicare taxes must file Form 941, Employer’s Quarterly Federal Tax Return, each quarter. Federal Income Tax and Social Security and Medicare Tax You must also report taxes you deposit by filing Forms 941, 943, 944, 945, and 940 on paper or through e-file. ![]() Generally, employers must report wages, tips and other compensation paid to an employee by filing the required form(s) to the IRS. If you fail to make a timely deposit, then you may be subject to a failure-to-deposit penalty of up to 15 percent. See the Employment Tax Due Dates page for information on when deposits are due. You must use electronic funds transfer ( EFTPS ) to make all federal tax deposits. ![]() The tax must be deposited by the end of the month following the end of the quarter. ĭeposits for FUTA Tax (Form 940) are required for the quarter within which the tax due exceeds $500. To determine your payment schedule, review Publication 15 for Forms 941, 944 and 945. Before the beginning of each calendar year, you must determine which of the two deposit schedules you are required to use. There are two deposit schedules, monthly and semi-weekly. In general, you must deposit federal income tax withheld as well as employer and employee social security and Medicare taxes. Here are the instructions from the IRS website: Depositing Employment Taxes To calculate federal income tax withholdings, you’ll need to refer to IRS Publication 15.įollowing IRS guidelines for depositing withheld taxes and paying your payroll taxes is absolutely crucial. Thus, her total withholdings would be $215.Īgain, it’s a good idea to use a spreadsheet to record the totals for each employee, as it makes calculating and remembering much easier. Jane, for instance, might pay $130 in federal taxes, $15 in social security, and $40 in state taxes, in addition to $30 in 401(k). Other benefits, such as company-subsidized health insurance.When determining withholding amounts, you’ll need to refer to your employees’ tax forms, and be sure they filled them out correctly. Payroll deductions, which are specified by the employee on their tax returns, are amounts that can be deducted from taxable income. Allowances are specified on the employee’s W-4. These calculations can be easily done in a spreadsheet, which should then be kept in your records in case any pay disputes arise.Įxemptions are the same as allowances - both terms refer to the money taken out of an employee’s paycheck. So if Jane worked 10 overtime hours at $22.50 ($15 x 1.5), she would be owed (10 x 22.5) $225.Īdding in her normal hours, Jane’s total gross pay for that week would be $600 + $225 = $825. To calculate overtime pay, take the number of hours over 40 and multiply it by their hourly overtime pay rate, 1.5. If you fail to pay your employees the correct overtime rate, your business could face serious fines and other penalties including having to pay your employee their back wages to correct the payroll error. Keep in mind that in Wyoming, the overtime law dictates that any hours over 40 in a week must be paid at one and a half times their regular pay rate. Then simply multiply their hours for that week, or month, by their hourly rate.įor example, if Jane works 40 hours in a week at $15 per hour, her gross pay (40 x 15) is $600. For hourly employees, calculating gross pay is easy.įirst, review their timesheets to make sure they have accurately tracked their hours. If you have salaried employees, gross pay is simply their contracted fixed pay amount, such as $2,000 per week. Your municipality may also require certain tax registrations, so check with your local government for requirements. In Wyoming, you’ll also need to register for state withholdings and set up an account through the Wyoming Internet Filing System. The EIN will never expire and is never duplicated, even if you go out of business. The application is form SS-4, and it can be printed out and mailed to the IRS, or submitted electronically. Once your information on the application has been validated, your EIN is assigned immediately. The application is free and can be found on the IRS website. The EIN also contains information about the state in which the company is registered.Įmployers use their EIN to file taxes, so in order to process payroll and ensure the proper withholdings and tax payments, you’ll need to first obtain your EIN. It is also known as a Federal Tax Identification Number (FTIN), or sometimes for corporations just Tax Identification Number (TIN).Īn EIN is used to identify US businesses and the taxpayers required to file the relevant tax returns. Your Employer Identification Number, or EIN, is like a social security number for your company, enabling the IRS to identify your business. ![]()
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