tags: CPA, employee Taxes, IRS, Manhattan CPA, medicare tax, NYC CPA, payroll services, payroll taxes, small business, small business finances, social security tax, Taxes, w-4
Business owners who have employees must withhold payroll taxes from their employees’ wages through the use of a W-4 form for each employee.
Payroll taxes amount to 15.3% of income, which represents the employee’s 7.65% Social Security and Medicare tax, plus the employer’s 7.65% Social Security and Medicare tax. You may also need to withhold state employee taxes and state and federal employer taxes, such as unemployment.
Withheld taxes must be deposited with the IRS on a monthly or semi-weekly basis, depending on which schedule applies to your company.
If you do not deposit your payroll taxes in a timely fashion, or miscalculate the amount of withholding, it’s likely that you may be charged penalties and interest.
Work closely with an accountant who is knowledgeable about small business finances and tax matters and can advise you on crucial issues like payroll and withholding. Another idea is to hire a payroll service that will process your employees’ salary checks, calculate withholding and remit your payments to the government. Many payroll services today offer extras for your employees, such as direct deposit.
More information on payroll taxes can be found online at the website of the IRS, www.irs.gov, in Publication 15, and at aggregate websites such as TaxSites.com.
Jonathan Medows, CPA
MEDOWS CPA, PLLC
About MEDOWS CPA, PLLC: We are a boutique CPA firm located in New York City (Manhattan), dedicated to helping small business owners and individuals. In addition, we also provide CPA services to people outside of the state and country.