Payroll Taxes
Managing payroll tax is often one of the most challenging tasks for any business, involving everything from classifying employees to completing the necessary forms for the IRS, as well as handling retirement funds and health insurance regulations. At mtcpa.us, we streamline your payroll process, assisting with employee onboarding and ensuring that all required forms, including W-2, 1099, 941, and Form 5500, are submitted accurately and on time.
Important Terms in Employment Taxes
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W-4
This form is crucial for assessing the tax liabilities of an employee, based on their dependents, social security number, or ITIN. It determines the amount that will be withheld from the employee's pay for tax remittance.
W-2
This form, provided to employees by January 31 for the following year, is required for filing the personal return (Form 1040) for individuals. It shows the gross wage earnings, income tax withholding, and Medicare withholding
1099
This is given to contractors at the end of the year, showing the gross amounts paid over $600. It is important to classify contractors correctly to avoid misclassifying them as W-2 employees. Misclassification can lead to payroll tax issues, fines, and penalties, which could include substantial financial penalties or legal consequences in severe cases.