All you need to know about employee hiring and payroll taxes

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Employee Hiring Process:

Hiring someone for your business as a team member is more like a match making between your business and employee. It is a decision that will have far reaching impact on the growth and development of your business, the environment of the workplace and not to forget your sanity.

When you hire an employee, there are two forms that you need get filled by an employee.

  1. Form W-4
  2. Form I-9 (Related to workers in Ohio)

These forms are necessary to gather basic information for the employees-

  • Name
  • Address
  • Social security No
  • Date of Birth
  • Work Authorization
  • primary identification

Additionally, it will guide the employer for deducting payroll taxes, based on the exemptions claimed. In the past, we have included one blog post on W-4. Refer to that to understand the W-4 exemptions and their impact on your tax withholdings.

What are the Payroll Taxes involved in creating a paycheck?

If you plan to have employees, you are generally responsible for:

  • Employer’s Portion of Social Security Taxes
  • Employer’s Portion of Medicare Taxes
  • Federal Unemployment Taxes
  • State Unemployment Taxes
  • Collection of Employee’s Share of Social Security &Medicare Taxes
  • Collection of Employee’s Share of Federal Withholdings
  • Collection of Employee’s Share of State & City Withholdings

As an employer, you are responsible for making deposits of the collected taxes at the appropriate times throughout the year. Unless you qualify as a small employer who files Form 944 annually, file Form 941 quarterly to inform the government of the withholdings and payments.

The IRS will require you to annually file Form 940 for unemployment tax information. Failure to file and pay on a timely basis could result in severe penalties.

Calculating payroll taxes and payment in a timely manner is complicated and time-consuming job. We at Tejal Dhruve CPA LLC offer full-service payroll, and we can take care of all your tax calculation and payment.

We will continue the talk of Employee Hiring Process-Difference in Employee and Independent Contractor in the next blog. In the meantime, Contact us today to take advantage of our “Claim Financial Sanity This Summer” offer of One Hour Complimentary Session for Insurance, Taxes, Financial Planning for your family.

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