Payroll Taxes

Every business that employs staff is subject to employee withholding tax. Employers are responsible for withholding taxes from employees' paychecks, forwarding them to the proper government agencies, and other employer tax obligations. The most relevant payroll taxes are:

Social Security and Medicare Taxes

Federal system of old-age, survivors, disability, and hospital insurance is that provides for by the Federal Insurance Contributions Act (FICA). The old-age, survivors, and disability insurances are financed by the social security tax, while hospital insurance is financed by the Medicare tax. Social Security taxes covers five major benefits:

• retirement,
• disability,
• family benefits,
• survivors
• and Medicare

Employers must withhold social security and Medicare taxes from employees' wages and pay the amount due. The rates of these taxes vary and only the social security tax has a limit based on the wage. However, for Medicare tax there is no wage base limit; all covered wages are subject to Medicare tax.

Federal Unemployment Tax

Federal Unemployment Tax provides for payments of unemployment compensation to jobless. Most employers pay both a federal and a state unemployment tax. Only the employer pays unemployment tax; it is not deducted from the employee's wages. It is also the employer who pays the state unemployment taxes, which are not deducted from the employee's wages as well.

Payroll taxes are due every operating quarter, and may set penalties and interest accruing, if not paid. Should these taxes are neglected long enough, the business can be closed and all assets seized to satisfy the debt.

The IRS considers unfiled payroll taxes to be the worst tax debt and regards them as "stealing" directly from the government. Varying from case to case, the taxes themselves can usually be negotiated down to a settlement, and the associated penalties and interest eliminated. Since these cases vary greatly in complexity, San Diego Tax Attorneys will scrutinize all of your options and suggest you the most affordable solution possible.

Get your payroll taxes settled with Los Angeles Tax Attorneys!

Related content about payroll taxes and trust funds can also be viewed at tax related websites