Accounting Chapter 12

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Accounting Chapter 12
2014-10-12 12:32:16
Payroll Taxes

Payroll taxes imposed on the employer
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  1. FICA and Federal Income Taxes
    To summarize these accounts of these taxes (FICA(employees share,Employers share)) the employer must file Form 941, Employer's Quarterly Federal Tax Return with the IRS at the end of each calendar quarter.  If during the quarter in question the employer's total tax liability is less than $2,500, payment may be sent with Form 941.  However, if the total taxes exceed $2,500, employers are not permitted to send payment directly to the IRS at the end of the quarter.  Instead, the taxes must be deposited by electronic funds transfers or in a Federal Reserve bank or other authorized bank.
  2. Monthly Deposit Schedule
    An employer is a monthly depositor for the current year if the total taxes (FICA and withheld federal income taxes) for the lookback period were $50,000 or less.  Under the monthly deposit schedule, taxes must be deposited by the 15th day of the following month.
  3. Semiweekly Deposit Schedule
    If an employer's total taxes during the lookback period were more than , the semiweekly deposit schedule is required. 

    Semiweekly Deposit Schedule

    IF the payday falls on a:

    Wednesday, Thursday, or Friday

    THEN deposit taxes by the following:


    IF the payday falls on a:

    Saturday, Sunday, Monday, or Tuesday

    THEN deposit taxes by the following

  4. Accounting for Taxes Deposited
    When any deposit of taxes is made, the employer should complete and submit to the bank a Form 8109, Federal Tax Deposit Coupon
  5. Summary of Steps to Determine Tax Deposit Schedule for FICA and Withheld Federal Income Taxes
    1. Identify the lookback period for the current year.

    2.  Add the total taxes reported on line 8 of Forms 941 filed during the lookback period.

    3. Determine if you are a monthly or semiweekly schedule depositor.

    IF the total taxes reported on Forms 941 during the lookback period were:

    $50,000 or less

    Then you are a: Monthly schedule depositor

    IF the total taxes reported on Forms 941 during the lookback period were:

    More than $50,000

    Then you are a: Semiweekly schedule depositor
  6. Federal Unemployment Taxes
    If the amount of federal unemployment taxes (FUTA) is more than $500.00 in any quarter, the total must be deposited in an authorized bank by the last day of the first month following the close of the quarter involved.  If the amount is $500.00 or less, no deposit is required.

    In addition to the quarterly reports that are made when FUTA taxes are deposited, employers also must file Form 940, Employer's Annual Federal Unemployment Tax Return, by January 31, following the end of the year.  This form summarizes the quarterly reports and deposits.
  7. When to deposit FUTA Taxes
    • Quarter          Ending         Due Date
    • Jan-Feb-Mar   Mar. 31        Apr. 30
    • Apr-May-Jun   Jun. 30        Jul. 31
    • Jul-Aug-Sept   Sept. 30      Oct. 31
    • Oct-Nov-Dec   Dec. 31       Jan. 31
  8. Form W-2 Wage and Tax Statement
    By January 31 of each year, employers are required to furnish copies of W-2, Wage and Tax Statement, to each person who was employed in any part of the previous year.  The employer is also required to send a copy of each employer's Form W-2 directly to the Social Security Administration.
  9. Form W-3: Transmittal of Wage and Tax Statements
    Along with Copy A of each employee's Form W-2, employers must file Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by the last day of February following each year.