The IRS is very strict when it comes to payroll taxes and deductions. One miscalculation could get a business in a lot of trouble with the government. This is why you need to keep accurate records of your business’s payroll and stay informed about payroll tax rules.
The first thing every business needs to do when they hire a new employee is to make sure the employee fills out a W-4. This form calculates payroll taxes based on the employee’s marital status and how many dependents they have. Most states base their payroll taxes on federal guidelines, which helps businesses correctly calculate withholdings for both federal and state taxes.
It is important for businesses to accurately calculate and report payroll taxes. Every employee should be given their own payroll account so these deductions can be paid to state and federal governments at the end of each year.
If you operate a fairly new business and have just begun to hire hourly or salaried employees and need help figuring your payroll taxes, you can speak to a payroll or tax professional for help.
