One of your duties as the owner of a business is to ensure you handle all the required taxes. There is a lot of information to keep straight, but if you forget to handle something or make a mistake, it could end up costing you a lot in the end. One area that you need to be aware of and understand is employment taxes. Here’s a look at the different taxes you need to know about as an employer and learn how to obtain EIN, which is important when filing taxes.
Income taxes are paid at the federal, state and local levels. Sometimes your employees may not have a local tax, though. At any rate, it is responsibility as the employer to make sure you withhold the proper amount of taxes from each paycheck for each employee. You also must keep good records because you must report the withholdings to each employee on a W-2 form at the end of the year.
These taxes are also withheld from your employees’ paychecks, but you also must match whatever you withhold. For example, if you withhold $10.00 from Molly’s paycheck for social security and Medicare, you must also pay in $10.00 of your money to match this withholding. There may also be an additional Medicare tax that the employee alone must pay if he or she makes over a certain amount.
The FUTA is something only you pay. It is an extra federal tax.
To file taxes and withhold taxes from your employees, you will need to apply for ein. You can get an EIN number application from the IRS or use a service that will help you file faster and easier. The company can get you’re a tax ID application and get it processed on your behalf.
When filing your taxes, make sure you get the proper forms. For example if you have a corporation, you will need a corporation application. If you need help with taxes or have questions, make sure to contact a company that specializes in these matters.