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Reporting Employment Taxes Generally, employers must report wages, tips and other compensation paid to an employee by filing the required form(s) to the IRS. You must also report taxes you deposit by filing Forms 940, 941 and 944 on paper or through e-file. Federal Income Tax and Social Security and Medicare Tax In general, employers who […]

You can: Pay with your bank account for free, or choose an approved payment processor to pay by credit or debit card. You can pay electronically, by phone or over the internet, through the EFTPS system. EFTPS is offered free by the U.S. Department of Treasury. You can pay by Electronic Funds Withdrawal. Use commercial software, a […]

  Open a separate payroll bank account and deposit the employee wages expense to be paid into it. Have this account set up to directly pay the IRS the taxes you withhold from your employees’ wages. We recommend using ADP or Paychex to handle your payroll account. These are companies that specialize in payroll, allowing […]

A corporation is a legal fiction. It is an entity created and regulated by state law. For all extensive purposes, it is an individual with all the rights and obligations of an individual. It will have its own EIN (employer ID #) which serves it the same as a social security number. It is taxed […]

Yes. Wage Levies/Garnishments are a common means of collecting taxes from taxpayers who have an outstanding tax liability and have not responded to the IRS previously and made alternative arrangements to get current with the IRS.  An IRS levy permits the legal seizure of your property to satisfy a tax debt. It can garnish wages, […]

The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work, not what will be done and how it will be done. Small businesses should consider all evidence of the degree of control and independence in the employer/worker relationship. Whether a worker is an independent contractor or employee depends […]

The Internal Revenue Service (IRS) is the revenue service of the United States federal government. The government agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue, who is appointed for a five-year term by the President of the United States. The IRS is responsible for collecting taxes and administering the Internal Revenue Code, the […]

NO! The IRS views this as stealing from the government and from your employee. These funds are being held in trust for the employee to pay his/her taxes. This is the most common way that small businesses with employees get in trouble with the IRS. While the small business owner may view his activities in […]

Unreported income is huge deal to the IRS. The agency recently estimated that the U.S. loses hundreds of billions per year in taxes due to unreported income. Considering the amount of lost revenue, it’s not surprising that the IRS has a process for determining unreported income. The IRS is more than happy with just about any method you […]

Most employers are required to file Form 941, Employer’s Quarterly Federal Tax Return, to report both the federal income taxes you withheld and the FICA taxes you withheld and paid during a calendar quarter. (Employers who qualify for annual reporting/payment, file Form 944.) Form 941, Employer’s Quarterly Federal Tax Return. Employers use this for to: report income taxes, social security tax, or Medicare tax withheld from employee’s paychecks, […]