Employment Taxes

Employment Taxes

This section explains the basic tenets of employment taxes and the respective reporting guidelines. In addition to compliance parameters, the differences between sub-contractors and employees are explained. Compliance issues are presented along with the associated deadlines.





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  • Year-End Preparation

    Year-End Preparation
    I dread January of every year. I have to spend so much time preparing the year-end payroll reports prior to the January 31 deadline. Not only must your quarterly’s and monthly’s tie together, but it has to match the general ledger at year-end.
  • Form 941 – The Basics

    Form 941 - The Basics
    Form 941 is the employer’s quarterly federal tax return. It reports how much federal income taxes were withheld; Social Security taxes and Medicare taxes that are due and how much was paid in deposits to the Internal Revenue Service. The report is filed every three months for each of the four calendar quarters.
  • FUTA – An Explanation to the Federal Unemployment Tax Act

    FUTA – An Explanation to the Federal Unemployment Tax Act
    Federal Unemployment Tax Act or FUTA for short is a part of the Internal Revenue Code and is an employer tax on wages paid to employees.  It is used to fund unemployment benefits. The tax is paid on the first $7,000 of wages paid to every employee. It is reported via Form 940 https://businessecon.org/resources/. The Form ...
  • Time for Those W-2’s

    Time for Those W-2’s
    For us accountants January brings the greatest payroll function of the year; printing the year end payroll reports. These include the W-2’s, W-3 and Form 940. They all must tie to the combined total of the quarterly 941 reports and the deposits made to the Internal Revenue Service.
  • The 1099 Subcontractor

    The 1099 Subcontractor
    The Internal Revenue Service promulgates rules and regulations concerning the employment status of workers. In general, workers are classed as W-2 employees and certain tests must be met to have the worker classed as a 1099 subcontractor. All 1099 subcontractors should be issued a Form 1099 in January of each year for the prior calendar year of ...
  • Simple Retirement Plan – Section 408(p)

    Simple Retirement Plan – Section 408(p)
    There are several different retirement plans available to the small business owner. But no plan offers so many advantages to small business as the Simple retirement plan. The positive attributes include: 1) Easiest to understand, 2) Least amount of paperwork, 3) No compliance reporting and 4) Plenty of flexibility. If you are in business and have less ...
  • Owner Compensation in an S-Corporation

    Owner Compensation in an S-Corporation
    One of the tax attributes of an S-Corporation over other forms of tax entities is the ability to reduce the overall tax obligation. Naturally the lower the overall tax requirement the more profit generated for the owner(s). The S-Corporation allows an owner to reduce their tax responsibility via the compensation package assigned to the owner.

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