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Payroll Taxes Small Business Article
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The Many Aspects of IRS Payroll Taxes
from:The Internal Revenue Service, or the IRS for short, is in charge of the taxes that are paid to the government each year. They handle not only your personal taxes, but the IRS payroll taxes as well. These are the taxes that get taken out of your paycheck each time that your employer pays you. Also, as an employer, there is a portion of IRS payroll taxes that the company needs to pay as well.
There are some things that you should know about the IRS payroll taxes that get paid by both an employee and an employer. When it comes to shared responsibility, there’s the FICA tax. This is a tax that is a mixture of Medicare taxes and social security taxes. These are a set rate that both of you share. You each pay 6.2% for social security and 1.45% for Medicare. There is no negotiation for how much money is paid. These are set rates and can’t be changed. Thus, the more money that an employee makes, the more money gets paid in IRS payroll taxes.
There are other taxes that get withheld from an employee’s paycheck as well. For example, there are federal IRS payroll taxes that get taken out. As opposed to FICA taxes, these percentages aren’t set. There are many factors that affect how much you end up paying. For instance, when you first start working for a company, you fill out a W-4 form. This form asks questions about your marital status and how many dependants you have. These aspects of your own personal life will affect how much gets taken out.
Another thing that affects the federal taxes that get withheld from your paycheck is how much money you make. For example, the more money you make, the larger the percentage of federal IRS payroll taxes gets taken out. This isn’t always the case and still depends on a lot of different factors including where you live.
You also have to pay state taxes depending on the state in which you live. These are handled much in the same way that the federal taxes are handled. They are a scalable percentage that depends on many factors. It’s hard to predict how much state taxes will be taken out of your paycheck.
IRS payroll taxes can be fairly confusing. There are so many things that can affect how much money gets taken out of your paycheck. You will also need to claim these amounts when you do your own personal taxes at the end of the year. Some people get a lot of the money back that they lost to taxes throughout the year.
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