3 Steps to Filing Employment Taxes
Running a business with employees definitely adds several line items to your tax responsibilities. Specifically, you’re required to report and deposit employment taxes, which include federal income taxes, Social Security and Medicare taxes, and Federal Unemployment (FUTA) taxes. Here is a list of employment tax due dates.
Depositing Employment Taxes
According to the IRS website, you must deposit any federal income tax withheld, plus both the employer and employee Social Security and Medicare taxes. The IRS has monthly and semi-weekly deposit schedules and you can determine which schedule applies to your business by reviewing either IRS Publication 15 or 51.
FUTA tax deposits are required for any quarter in which the tax is more than $500 and must be made by the end of the month following the end of the quarter. The FUTA tax is paid entirely by you, the employer, and is not withheld from your employees’ wages.
All federal tax deposits must be made electronically through the Electronic Federal Tax Payment System (EFTPS). To enroll, visit the website or call 1-800-555-4477.
Reporting Employment Taxes
Generally, you must report wages, tips and other compensation paid to your employees by filing Form W2 with the IRS at the end of the year. This is in addition to reporting the taxes you deposit. The reporting of income, Social Security and Medicare taxes is done each quarter using Forms 940, 941 (for most businesses) and 944 on paper or through e-file. FUTA tax is reported annually using Form 940.
Maintaining Tax Records
You should keep all records associated with your employment taxes, including amounts and dates of all wage and pension payments made to all employees, for at least four years.