The Basics of Payroll Taxes

If you own a business or are thinking about starting a business, you have probably heard the term “payroll taxes” getting tossed around a lot.

This term refers to the taxes that you, as an employer, will be legally obligated to withhold from your employees for income taxes and FICA taxes.

Your job, as an employer, is to collect all of these required taxes and, then, to pay them to the IRS and report on them by filing the appropriate reports.

All of this can seem a bit harrowing, especially when you’re just starting out, but, don’t worry! It gets easier to understand, especially if you have a qualified accountant on your side.

Getting Started

If you are truly “new to the game” when it comes to having and taxing employees, then you should know that your first step is to register with the IRS in order to get a legal employer identification number. You also have to register with your state.

Once you have done these important things, it’s just a matter of knowing and understanding what is required from you in terms of payroll taxes and then following the rules perfectly.  

Your Job

As an employer who withholds taxes, you will have several responsibilities on your plate. These include, to name a few:

l  Making sure all of your employees turn in the right tax documents when they are hired and at other times throughout the year

l  Filing payroll tax reports by the appropriate deadlines

l  Withholding payroll taxes from employee checks

l  Paying those same payroll taxes to the IRS

l  Calculating payroll tax deductions and reporting them appropriately

If all of that seems like too much to manage on top of running a successful business, know that you are not alone.

A great many businesses turn to tax professionals for these matters. If you think you should be one of them or even if you just have questions or concerns about filing payroll taxes, don’t hesitate to contact the friendly professionals at Lewis CPA for help and guidance.