You need to deposit payroll taxes on time, failure to which you’re liable for a 15% penalty. Payroll taxes refers to the local, state, and federal taxes that an employer withholds from the worker’s paycheck. It would be best if you understood the current tax rates for accurate calculation of payroll tax.
Filing payroll taxes can be a complicated process. Yet, you can’t wish it away as an employer. You need to prepare well and get all the information before delving in.
Read this article to know how to file payroll taxes easily.
1. Prepare for Payroll
It would help if you had proper preparation before you can file for payroll successfully. The first step involves getting updated W-4 forms from employees. The information is vital in establishing the tax filing status of your workers.
With data on the W-4 forms, you’ll know the state and federal amounts that each employee should contribute. Consider other deductions such as retirement contributions or health insurance.
Familiarize yourself with the payment schedule and determine the paydays and periods. You might also need to take note of non-exempt employees and hours worked. Check out www.paystubcreator.net to create accurate pay stubs within the shortest time possible.
It is advisable to review the payroll register to ascertain that the listed amounts are accurate. Incorrect information can expose you to fines.
2. Make Payroll Tax Deposits
Your payroll tax deposits depend on your payroll’s size. Make monthly or semi-weekly deposits to the IRS. With the money withheld and deducted from employees, pay the taxes, Medicare, and Social Security.
Make your deposit payments through the electronic filing systems by IRS or Form 8109. Besides the standard deposits, you need to pay deposits to your state and locality. Federal unemployment tax is another payment that you can’t ignore.
Failure to make these payments makes you liable to 100% in fines. Follow all the guidelines to save your company from financial trouble.
3. Payroll Tax Reports
When learning how to file payroll taxes, reporting is a crucial aspect. An employer should send quarterly reports through Form 941. The report shows payroll tax liability.
You’ll also need to send the unemployment tax report through Form 940. The report highlights unemployment tax liability. The reports submitted should also involve details on workers’ compensation.
4. Have a Payroll Register and Tax Calendar
A payroll register helps you to keep track of your workers’ payroll information. You can check out accounting systems that have payroll registers. The software will make it easy to record relevant employee’s information.
A yearly tax calendar is also essential. It helps you to keep track of all payroll tax dates throughout the year. With payroll software, you can add all the tax dates. The calendar will reduce the possibility of late payments.
Knowing How to File Payroll Taxes Should Be the Goal of Every Employer
Filing payroll taxes is a requirement you can’t afford to ignore. If you know how to file payroll taxes, you’ll save yourself the stress of outsourcing. With the variety of online tools available, this seemingly overwhelming activity has become easier.
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