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How Do I Determine the Amount of Payroll Taxes to Deposit with the IRS?

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Question: How Do I Determine the Amount of Payroll Taxes to Deposit with the IRS?
Each employer must withhold income taxes and FICA taxes from employees and make payroll tax deposits with the IRS, either monthly or semi-weekly, depending on the amount of payroll taxes.
Answer:

How Do I Determine the Amount of Payroll Taxes to Deposit with the IRS?

The amount of payroll taxes that must be deposited with the IRS is:

  • The total amount of federal income tax withheld from employee pay for the period. The amount of withholding is determined by the employee's W-4 form.
  • The total amount of FICA taxes withheld from employee pay for the period, and
  • An amount of FICA tax required to be paid by the employer, equal to the amount withheld from employees (See below for the special case of employee and employer FICA tax payments in 2011).

The period mentioned above is either semi-weekly or monthly, depending on the amount of taxes that must be paid. Semi-weekly payments are due the Wednesday of the week following the payroll date, and monthly payments are due the 15th of the month following the month for which the payroll taxes are due.

An example
Let's say you paid employees in January and your withholding tax and FICA tax deducted from employees was: $1,945 in withholding and $3,559 in FICA taxes. You must deposit these amounts, plus an additional #$3,559 in FICA taxes which are payable by your company as the employer.

FICA Taxes for Employees in 2011
The Tax Reform Act, signed in December 2010, reduces employee FICA taxes by 2% (the reduction is in the Social Security portion of the FICA taxes - 4.2%). But employer withholding is not reduced; the Social Security portion of FICA taxes for employees is still 6.2$.

More about Payroll Taxes.

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