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Get real about Home Businesses!!!
Copyright 2005 Michelle Cornes Are you thinking it might be time to take control and work for yourself? The degree to which YOU are up for this challenge is everything. Here are some of the things about yourself that you really need to be...
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Professional Transcription and Your Business
Got stacks of audio tapes that need to be converted to a more user-friendly format? Professional transcription services may be the answer. Professional transcriptionists can take standard or micro cassette tapes and produce a typed...
Selling Your Business - A Tool To Reduce Taxes
SELLING YOUR BUSINESS – A TOOL TO REDUCE THE TAX BITE By David M. Kauppi, MBA, CEA, CBI, President Mid Market Capital “I would rather expire at my desk than to sell my business and pay Uncle Sam one dime in taxes.” How many owners that have paid...
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Five Tips for First Time Entrepreneurs
It seems so long ago that I started my first business. Since that time, I've created several successful businesses and learned a lot of lessons along the way. There are several things I wish I would have known in the early days of my entrepreneurial...
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Employment Taxes – What Are They?
If you have employees, you are responsible for paying a variety of taxes at the federal, state, and local levels. You must also withhold certain taxes from the paychecks of your employees. So, what are employment taxes?
Employment taxes include the following.
1. Federal income tax withholding
2. Social Security and Medicare taxes
3. Federal unemployment tax (FUTA).
Federal Income Taxes/Social Security and Medicare Taxes
You generally must withhold federal income tax from wages paid to an employee. Form W-4 is used to determine the specific amount, although most payroll services or your accountant will do this for you.
Social security and Medicare taxes pay for benefits that workers and families receive under the Federal Insurance Contributions Act (FICA). Social security tax pays for benefits for the retired, survivors, and disability insurance distribution provisions of FICA. Medicare tax pays for benefits under the medical care provisions of FICA. As an employer, you must withhold a percentage of these taxes from employee and match the withholding amount.
In general, you must deposit these
taxes by check or cash to an authorized financial institution, typically your bank. Check with your tax professional to make sure you are not required to use the Electronic Federal Tax Deposit System (EFTPS). Regardless of the payment method, you will then report them on Form 941, the Employer’s Quarterly Federal Tax Return
Federal Unemployment Tax (FUTA)
FUTA is a combined federal and state program that provides unemployment compensation to the unemployed. As a business owner, you are solely responsible for paying this tax, to wit, nothing is withheld from the paychecks of your employees. FUTA is determined by using Form 940, but you are encouraged to use a tax professional to determine payment amounts.
Employment taxes can be frustrating for a small business owner. They are, unfortunately, a necessary evil as your business grows.
About the Author
Richard Chapo is with Business Tax Recovery - Obtaining tax refunds for small businesses for overpaid taxes. Go to our article section to discover tax strategies and deductions.
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