An Introduction To Employee Tax Issues
The IRS web site (www.irs.gov) is about to become your next favorite web site. Keeping track of your tax payments and forms gets easier once you know what you need to do. Do not assume that your accountant will handle it all for you. Start now to become educated and save yourself some headaches and some fines. One thing is for sure, having employees is not easy, especially where taxes are concerned. However, I believe that the trouble is worth the return in the end.
Let’s start at the very beginning. You have decided to hire an employees, you have interviewed candidates, made your decision and offered the job to the lucky person. They accepted your offer. Now, there are important steps to follow to ensure that all of your employee tax issues are taken care of at the federal, state, and local levels.
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The best way to handle figuring the taxes that you need to deduct from your employees’ income and the amount you need to match is to buy accounting software that will do it for you. I recommend either Quick Books or Peachtree. Both of these give you the formulas you need to make your life easier. My personal experience is with Peachtree, which has re-bounded from their initial reputation of being hard to understand and difficult to use. Their re-formatted software is now very user friendly. Quick Books continues to be the most popular due to longstanding high marks from consumers. Be sure that your accountant uses, or is familiar with the accounting software you select. Unfortunately, mine is not and so I must print out everything. This can make taxes even more time consuming than they already are.
If you would prefer not to use software but to figure the formulas out on your own, good luck. The information you need can be found on the payroll tax tables supplied by the IRS. Contact their website to request the tax booklet with this information.