Federal payroll taxes are generally remitted quarterly on Form 941.The employment taxes are imposed on both employers and employees on wages paid to the employee for Social Security and Medicare.
The 7.65% tax rate is 6.2% for Social Security and 1.45% for Medicare. The employer deducts this amount from the employee's pay and remits the 7.65% employees share with a matching employer share of 7.65% for a total of 15.3%.
For 2015 the tax applies to a wage base of $118,500. There is an additional .9% Medicare tax applied to wages over $200,000 for a single person and $250,000 for a joint tax return.
In addition to the quarterly 941 tax returns, a Form 940 tax return is due annually for Unemployment Compensation.
The tax is imposed on the first $7,000 of wages paid per employee. The tax rate is 6%; however, the rate is reduced to only .6% for participation in state unemployment insurance laws.
Federal payroll tax payments (deposits) are complicated. If the tax liability is very low for the quarter then the amounts can be remitted along with the tax returns. As the tax liability increases, the tax amounts have to be reported monthly, then weekly, etc. Refer to the IRS website www.irs.gov for specific instructions.
Please call us at (386)-668-3328 if you need help resolving any of these Payroll issues. We have years of experience preparing payroll tax returns and representing clients before the IRS and State authorities. You do not have to talk to the IRS or the State. We will take care of any problems and keep you informed of our progress.