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Employment Taxes
If you have employees, you are responsible for several federal,
state, and local taxes. As an employer, you must withhold certain taxes from your employees
pay checks. Employment taxes include the following.
� Federal income tax withholding
� Social Security and Medicare taxes
� Federal unemployment tax act (FUTA).
Federal Income Taxes/Social Security and Medicare Taxes
You generally must withhold federal income tax from your employees
wages. To figure how much to withhold from each wage payment, use the
employee's Form W-4. Social security and Medicare taxes pay for benefits
that workers and families receive under the Federal Insurance
Contributions Act (FICA). Social security tax pays for benefits under
the old-age, survivors, and disability insurance part of FICA. Medicare
tax pays for benefits under the hospital insurance part of FICA. You
withhold part of these taxes from your employee's wages and you pay a
matching amount yourself.
Which form do I file to report federal
Income Taxes, Social Security, and Medicare taxes?
� Form 941, Employer's Quarterly Federal Tax Return
� Form 940, Employer's Annual Federal Unemployment (FUTA)
Tax Return
Federal Unemployment (FUTA) Tax
The federal unemployment tax is part of the federal and state program
under the Federal Unemployment Tax Act (FUTA) that pays unemployment
compensation to workers who lose their jobs. You report and pay FUTA tax
separately from social security and Medicare taxes and withheld income
tax. Employees do not pay this tax or have it withheld from their
pay. Report FUTA taxes on Form 940, Employer's Annual Federal
Unemployment (FUTA) Tax Return.
We want to thank E - C H X P A Y R O L L S O L
U T I O N S for providing us with the information for this article.
Visit
www.AmeriLawyer.com/payroll if you need help with your payroll
questions.
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