Employer's Tax ObligationIncome Tax Withholding
Every employer is required to withhold from wages paid to each employee whose wages (after applying the number of withholding allowances - exemptions allowable on the federal income tax - claimed by the employee) are subject to withholding as shown by the withholding tables, in Circular E. Each employer should obtain a copy of Circular E. This may be done by dialing 1-800-829-1040. The amounts required to be withheld are set forth in the tables in Circular E.
FICA (Social Security) & FICA-Med (Medicare) tax withholding
and Employers' FICA & FICA-Med tax contribution
Every employer must withhold from wages paid to each employee an amount equal to 7.65 percent of all wages. Tax rates and the social security wage base limits are treated separately for FICA and FICA-Med. Social security and Medicare taxes have different rates and only the social security tax has a wage base limit. The wage base limit is the maximum wage that is subject to the tax for the year. Determine the amount of withholding for social security and Medicare taxes by multiplying each payment by the employee tax rate. There are no withholding allowances for social security and Medicare taxes.
Tips are included as "Wages" and must be reported to the employer by the 10th day of the month after the month in which they are received. Meals, lodging and other payments in kind, unless furnished for employer's convenience and on the premises, are subject to FICA tax at the fair market value thereof. Both employee and employer will be paying 7.65 percent.
Employer's Tax
Every employer must pay FICA tax based on the wages or salaries of all employees. The employee tax rate for social security is 6.2% (amount withheld). The employer tax rate for social security is also 6.2% (12.4% total). For 2012, the wage base limit is $110,100. For other years visit: Social Security Administration
The employee tax rate for Medicare is 1.45% (amount withheld). The employer tax rate for Medicare is also 1.45% (2.9% total). There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax.
Partners and Corporate Officers
Partners are not employees. They are required to pay FICA tax at the rate of 15.3 percent on their earnings during the calendar year.
Returns and Payment of Income and FICA Taxes Withheld and Employer's FICA Tax
Payments:
a) If the cumulative liability for any quarter is less than $500, the tax may be paid when the quarterly return (Form 941) is filed, or it may be deposited in the calendar month after the end of the quarter. Form 941 is required to be filed for each calendar quarter by the last day of the following month, to wit: April 30, July 31, October 31 and January 31.
b) If the cumulative liability at the end of any month is $500 or more, the amount payable must be deposited in an authorized depository on or before the 15th day of the next month.
c) If on the 3rd, 7th, 11th, 15th, 19th, 25th or last day of any calendar month, the cumulative liability is $3,000 or more, the deposit must be made within the next three banking days.
d) The deposit required, is made in a commercial bank, Federal Reserve Bank, or other authorized depository, together with a completed 8109 coupon -- Federal Tax Deposit Coupon. EFTPS is the easiest way to pay your federal taxes. EFTPS is a service offered free by the U.S. Department of the Treasury for people to pay federal taxes electronically.
Visit: EFTPS
Quarterly Return
Every employer required to withhold income tax and/or to withhold and pay FICA tax must file a quarterly return of withheld income and FICA tax and employer's FICA tax on Form 941. Employers in New Hampshire must file with Internal Revenue Service Center, Cincinnati, OH 45999-0101. As stated above, this return, if accompanied by a payment of withholding taxes must be filed by the end of the calendar month following the end of the quarter. If all taxes have been deposited, it may be filed at any time up to the last day of the following month.
Determing the Income Tax to be Withheld
Each new employee should give the employer a signed W-4 Form, when starting work, showing the number of withholding allowances (exemptions) applicable. If the employee does not provide the Form W-4, income tax must be withheld as if the employee were single, regardless of the number of exemptions he or she is entitled to.
Every employer must withhold from wages paid to each employee an amount equal to 7.65 percent of all wages. Tax rates and the social security wage base limits are treated separately for FICA and FICA-Med. Social security and Medicare taxes have different rates and only the social security tax has a wage base limit. The wage base limit is the maximum wage that is subject to the tax for the year. Determine the amount of withholding for social security and Medicare taxes by multiplying each payment by the employee tax rate. There are no withholding allowances for social security and Medicare taxes.
Tips are included as "Wages" and must be reported to the employer by the 10th day of the month after the month in which they are received. Meals, lodging and other payments in kind, unless furnished for employer's convenience and on the premises, are subject to FICA tax at the fair market value thereof. Both employee and employer will be paying 7.65 percent.
Employer's Tax
Every employer must pay FICA tax based on the wages or salaries of all employees. The employee tax rate for social security is 6.2% (amount withheld). The employer tax rate for social security is also 6.2% (12.4% total). For 2012, the wage base limit is $110,100. For other years visit: Social Security Administration
The employee tax rate for Medicare is 1.45% (amount withheld). The employer tax rate for Medicare is also 1.45% (2.9% total). There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax.
Partners and Corporate Officers
Partners are not employees. They are required to pay FICA tax at the rate of 15.3 percent on their earnings during the calendar year.
Returns and Payment of Income and FICA Taxes Withheld and Employer's FICA Tax
Payments:
a) If the cumulative liability for any quarter is less than $500, the tax may be paid when the quarterly return (Form 941) is filed, or it may be deposited in the calendar month after the end of the quarter. Form 941 is required to be filed for each calendar quarter by the last day of the following month, to wit: April 30, July 31, October 31 and January 31.
b) If the cumulative liability at the end of any month is $500 or more, the amount payable must be deposited in an authorized depository on or before the 15th day of the next month.
c) If on the 3rd, 7th, 11th, 15th, 19th, 25th or last day of any calendar month, the cumulative liability is $3,000 or more, the deposit must be made within the next three banking days.
d) The deposit required, is made in a commercial bank, Federal Reserve Bank, or other authorized depository, together with a completed 8109 coupon -- Federal Tax Deposit Coupon. EFTPS is the easiest way to pay your federal taxes. EFTPS is a service offered free by the U.S. Department of the Treasury for people to pay federal taxes electronically.
Visit: EFTPS Quarterly Return
Every employer required to withhold income tax and/or to withhold and pay FICA tax must file a quarterly return of withheld income and FICA tax and employer's FICA tax on Form 941. Employers in New Hampshire must file with Internal Revenue Service Center, Cincinnati, OH 45999-0101. As stated above, this return, if accompanied by a payment of withholding taxes must be filed by the end of the calendar month following the end of the quarter. If all taxes have been deposited, it may be filed at any time up to the last day of the following month.
Determing the Income Tax to be Withheld
Each new employee should give the employer a signed W-4 Form, when starting work, showing the number of withholding allowances (exemptions) applicable. If the employee does not provide the Form W-4, income tax must be withheld as if the employee were single, regardless of the number of exemptions he or she is entitled to.
No comments:
Post a Comment